KBRA publishes the issuer and senior unsecured ratings of B+ for Planet Financial Group, LLC (“Planet” or “the company”). Additionally, KBRA publishes the issuer rating of BB- for its operating company, Planet Home Lending, LLC. The Outlook for all long-term ratings is Stable. These ratings were assigned on an unpublished basis on May 20, 2026.
Key Credit Considerations
Planet’s ratings are supported by mostly solid, multiyear operating performance (with consistent profitability), through the residential mortgage industry’s significant cyclicality and intense competition. The company’s operating strategy and execution associated with it (including risk management), led by a seasoned management team, is considered favorably. As one element of this, we consider Planet’s refined, well-executed MSR hedging program to benefit the company’s operating, as well as its financial profile. Prospectively, continued, demonstrated recapture success, particularly if a more constructive interest rate environment emerges, as well as peripheral revenue opportunities and anticipated operating efficiency gains, should benefit Planet’s operating performance.
Notwithstanding our perspective on Planet’s key credit strengths, the company’s core leverage has increased materially in recent years, as debt – both secured and unsecured – has been the principal source of funding for a growing MSR investment; with owned UPB up more than twofold since YE22. While this increasing trend in core leverage has also been evident at most leading competitors, Planet’s relative ‘core’ common equity capitalization (Note: we analytically exclude ESR-related noncontrolling interest that is reported as company equity) remains firmly lower than peers. Growth in ‘corporate debt’, despite full retention of earnings, has driven the company’s consolidated corporate debt-to-equity to ~5x. With that said, management seems as committed to reducing core leverage as possible over the near-to-intermediate-term; though, as currently envisioned, most likely exclusively from operations. Planet’s ratings also consider a predominantly short-to-intermediate term, market funded business model that is similar to most peers. The company’s operating liquidity remains adequate.
Rating Sensitivities
With firmly higher-than-peer core leverage, positive rating momentum would require some discernable and reasonably consistent deleveraging, with continued favorable operating performance. A deterioration in profitability, higher-than-expected leverage, together with any diminution of liquidity profile, would likely facilitate a negative rating action.
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Methodologies
- Financial Institutions: U.S. Residential Mortgage Company Rating Methodology
- Corporates & Financial Institutions: Corporate Instruments / Corporate-Linked Obligations Notching Global 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.
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