KBRA Assigns Preliminary Ratings to Mulligan Asset Securitization III LLC, Series 2026-1

KBRA assigns preliminary ratings to four classes of notes (the “Notes”) issued by Mulligan Asset Securitization III LLC, Series 2026-1.

Mulligan Funding, LLC (“Mulligan” or the “Company”), provides financing to small and medium-sized business through the use of proprietary risk scoring models, transactional data and technology systems. Since inception, Mulligan has funded over $2.8 billion to more than 29,000 merchants. The Company is primarily owned by its senior management as well as Ptolemy Capital LLC. The Company has over 110 employees and is headquartered in San Diego, CA. Mulligan has been profitable in most years since 2008, according to the Company.

Mulligan Asset Securitization III LLC (the “Issuer”) will issue four classes of Series 2026-1 Notes: Class A, Class B, Class C and Class D (collectively, the “Notes” or “Series 2026-1 Notes”) totaling $100.0 million. This transaction (“Mulligan 2026-1”) represents the Company’s third securitization. The transaction features a 36 month revolving period unless a Rapid Amortization Event has occurred (the “Revolving Period”). During the Revolving Period, the Issuer will purchase additional receivables that meet the eligibility criteria and concentration limits.

The Series 2026-1 Notes are “expandable” term notes such that at any time during the Revolving Period (defined below), the Issuer may periodically upsize the current Notes, up to a maximum amount of $500 million, as long as certain conditions are met, including providing Rating Agency Confirmation (“RAC”). The consent of existing noteholders will not be required for these upsizes, but they may dilute the control and voting rights of existing noteholders. The Issuer may also issue additional series of notes without the consent of the holders of the Series 2026-1 Notes. Additionally, the transaction features a partial Call Option, whereby up to 30% of the outstanding balance of the notes may be redeemed for 103% of par for the first 12 months or 101% of par for the second 12 months, such a call would be applied pro-rata between the Notes.

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Methodologies

• ABS: General Global Rating Methodology for Asset Backed Securities
• Structured Finance: Global Structured Finance Counterparty Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1014841

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