KBRA Assigns Preliminary Ratings to HTS Fund II LLC

KBRA assigns preliminary ratings to two classes of notes issued by HTS Fund II LLC (HTS 2025-1), a $155.3 million property tax lien ABS transaction. Proceeds from the Notes will be used to acquire a portfolio of 4,649 property tax loan assets from municipalities within Texas, including Harris County (21.9%), Dallas (13.3%), and Bexar (6.4%), with a redemptive value of approximately $138.2 million (the Initial Tax Loans) and a weighted average interest rate of 12.8%. HTS 2025-1 is a partially pre-funded transaction where the Notes are initially supported by $21.3 million deposited into two prefunding accounts (approximately 13.7% of the initial Note balance) that will be used to fund tax loans subject to certain eligibility criteria.

Home Tax Solutions, LLC (HTS or the Company) was founded in 2012 and is a specialty finance holding company that funds real estate tax loans in Texas. The Company is comprised of 30 individuals operating out of five offices with headquarters in Dallas. As of April 30, 2025, HTS has originated approximately $325.0 million in tax loans since inception, of which approximately $142.5 million are outstanding.

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Methodologies

• ABS: Property Tax Lien ABS Rating Methodology
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating 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: 1009960

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