Abacus Global Management closes $400M life insurance securitization

Abacus Global Management (NYSE: ABX) has closed a dual-tranche securitization collateralized by a diversified portfolio of life insurance policies, with a total structure valued at over $400 million, according to a company press release.

The transaction includes Class A and Class B notes along with a residual interest. The notes received an investment-grade rating from a third-party rating agency. The offering was oversubscribed and upsized in response to investor demand.

Abacus said it plans to use net proceeds to support continued policy origination and fund general corporate purposes. The company also said the transaction expands its assets under management and is structured to increase the share of revenue derived from recurring, fee-related earnings rather than transactional gains.

In the transaction, a special-purpose vehicle issued investment-grade notes backed by the policy pool, which the company continues to service through its affiliates.

Chief Investment Officer Elena Plesco said, "By packaging longevity-based assets into formats that institutional fixed income investors can own, we broaden and diversify our investor base, deepen the distribution channels available to our Asset Group, and build a durable, management fee driven revenue base, all while continuing to turn our balance sheet multiple times per year."

Chairman and Chief Executive Officer Jay Jackson called the deal the largest securitization to date for the company, adding, "The investment-grade rating and the demand we saw from institutional investors confirm something we've believed for a long time. There's a deep market for longevity-based assets among the largest fixed income buyers in the world."

The notes were offered and sold in the United States as a private placement to accredited investors under Section 4(a)(2) of the Securities Act of 1933 and have not been registered under the Securities Act or any state securities laws.

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