PCL Funding XII secures final provisional ratings on 2026-1 note issuance

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PCL Funding XII 2026 ratings

Highlights

DBRS Ratings Limited finalised provisional ratings for PCL Funding XII's Series 2026-1 notes with AAA (sf) for Class A, A (high) (sf) for Class B, and A (sf) for Class C.
Morningstar DBRS based its assessment on the transaction's capital structure, credit enhancement, collateral quality and diversity, and Premium Credit Limited's servicing capabilities.
The Series 2026-1 notes are backed by UK and Ireland financing advances for nonlife insurance premia, forming part of PCL’s master issuance structure supported by consistent servicing and amortisation requirements.

Ratings finalised for 2026-1 notes

As reported by Morningstar DBRS, DBRS Ratings Limited finalised provisional credit ratings on notes issued by PCL Funding XII PLC, assigning AAA (sf) to the Series 2026-1 Class A Notes, A (high) (sf) to the Class B Notes, and A (sf) to the Class C Notes.

Morningstar DBRS does not assign a credit rating to the Series 2026-1 Class D Notes issued in the same transaction. The agency says its assessment reflects the transaction's capital structure, the level of credit enhancement available under stress scenarios, and the ability of the structure to withstand stressed cash flow assumptions while repaying the notes.

The rating rationale also includes Premium Credit Limited's origination, underwriting and servicing capabilities, along with an operational risk review that Morningstar DBRS considers consistent with an acceptable servicer profile. It further takes into account the financial strength of transaction parties, the credit quality and diversification of the collateral, and the legal structure's consistency with its structured finance criteria.

Portfolio structure and market relevance

The Series 2026-1 transaction is backed by financing advances made by Premium Credit Limited to companies and individuals in the UK and Ireland for nonlife insurance premia and other payment plans. Premium Credit Limited acts as originator and servicer, while Link Financial Outsourcing Limited is in place as backup servicer.

The issuance forms part of the wider PCL-related master issuance structure, under which outstanding series of notes are supported by the same pool of receivables and generally follow similar requirements on servicing, amortisation events, priority of distributions and eligible investments. Morningstar DBRS also says its analysis factors in its sovereign credit ratings for both the UK and Ireland, which stand at AA with a Stable trend.

In our earlier article on KBRA’s credit rating affirmation for FB Financial and its main bank subsidiary FirstBank, we outlined how the agency kept a Stable Outlook while leaving key long- and short-term debt and deposit ratings unchanged. The piece highlighted improving profitability after securities restructurings and the Southern States Bancshares acquisition, alongside solid asset quality, conservative capital metrics, and a sound funding and liquidity profile.

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