First Help Financial Social Bond Framework Second-Party Opinion (2022)
First Help Financial
Use of Proceeds
Sustainalytics is of the opinion that the First Help Financial Social Bond Framework is credible and impactful and aligns with the four core components of the Social Bond Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds, Access to Financial Services, is aligned with those recognized by the Social Bond Principles, which seek to achieve positive socio-economic outcomes for target populations. Sustainalytics considers that investments in the eligible category will lead to positive social impacts in the US and advance the UN Sustainable Development Goals, specifically SDGs 8 and 10.
PROJECT EVALUATION / SELECTION
First Help Financial’s Credit Committee, comprising its CEO, CFO, CCO1 and Executive Vice President (Originations), is responsible for overseeing the evaluation and selection of eligible receivables per the criteria defined in the Framework. First Help Financial has adopted environmental and social risk mitigation policies and processes that are applicable to the allocation decisions and vehicle dealers. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
First Help Financial’s CEO will be responsible for overseeing the allocation of proceeds, which will be tracked using an internal tracking system. First Help Financial intends to allocate 80% or more of the net proceeds from the asset-backed securities to the eligible receivables at the time of issuance and intends to achieve full allocation within three months of the respective issuance. Pending full allocation, unallocated proceeds will be held in an escrow account (in cash) by the indenture trustee and will be invested into money market bonds during the prefunding period. This is in line with market practice.
First Help Financial intends to report on the allocation of proceeds on a quarterly basis and the impact of proceeds on an annual basis on its website until full allocation. Allocation reporting will include allocation details towards eligible receivables, and the amount of unallocated proceeds. Impact reporting will include metrics such as: (i) the number of borrowers with limited English proficiency, (ii) the number of borrowers with no FICO score at origination, and other metrics. This is in line with market practice.