AltFi.com uses cookies on this website. They help us to know a little bit about how you use our website, which improves the browsing experience and marketing - both for you and for others. They are stored locally on your device. By continuing to use this site you accept this use of cookies. Go to the Privacy and Cookies page for more information. You'll see this message only once.
Not signed in. Log in here.

Your daily download of all things alternative finance and fintech, from us at AltFi


 

SoFi ploughs ahead with consumer loan securitisation




By Ryan Weeks on 23rd June 2016


SoFi – the financial services provider for millennials – has closed a $380m securitisation of consumer loans.

 

The deal, which closed on Tuesday, was SoFi’s first rated bond offering of consumer loans. The platform has previously closed 9 rated student loan securitisations, according to the Wall Street Journal. The WSJ also reports that a mortgage backed offering is next on the agenda for SoFi.

 

SoFi is said to have kept 5% of the deal on balance sheet, more than it has in the past. SoFi’s capital markets team has put a great deal of effort into marketing the deal, meeting with a host of potential investors in the US and abroad over the past few months. 24 of the 28 investors in the deal are said to have previously met with SoFi executives.

 

SoFi’s consumer backed securitisation was given a single-A rating by the Kroll Bond Rating Agency. Kroll’s base-case expectation of cumulative net losses on the portfolio was between 7.5% and 9.5%.

 

The $380m deal is an encouraging sign for the online lending industry, which has been suffering from a sharp decline in investor demand of late. Lending Club has been forced to consider funding loans on balance sheet following the departure of former CEO Renaud Laplanche. With institutions taking a more cautious approach in general, both Lending Club and Prosper have been sharpening their retail investment propositions.

 

Lending Club was said to be planning an inaugural securitisation of consumer loans with Goldman Sachs and Jefferies in early May, but the deal has been put on hold while investors wait for the current market turmoil to settle. 

Comments


Enter your name:

Enter a comment in the box below: