New $100m Lending Club securitization

By Daniel Lanyon on 1st December 2016

P2P/Marketplace Lending

Nearly seven months on from the Laplanche exit, Lending Club is launching a new round of ABS. 

New $100m Lending Club securitization

US marketplace lending giant Lending Club will dip its toe back in the securitization market with a $101.75m consumer loan ABS transaction  from the Lending Club Issuance Trust.

Lending Club had eschewed ABS deals until May this year, when it planned its maiden issuance backed by the investment bank Jefferies. However, it shelved the deal after allegations of impropriety that led to its co-founder and chief executive officer Renaud Laplanche resigning his post.  Since that tricky time for Lending Club, the firm has completed its first ABS deal with a $150m float in June, backed by Jefferies.

The new ABS, Lending Club's second, is named LCIT 2016-NP2. It is split into two notes have which have been assigned preliminary ratings by Kroll Bond Rating Agency.

Ram Ahluwalia, CEO of Peer IQ, which tracks marketplace lending secrutitization, says Lending Club will be particularly pleased with the rating on the senior bond.

Kroll Bond Rating Agency applied its ‘’General Rating Methodology for Asset-Backed Securities" as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Lending Club’s historical gross loss data, the firm says.

The ratings agency also conducted an operational assessment of the Lending Club platform, as well as a review of the transaction’s legal structure and transaction documents.

The transaction has initial credit enhancement levels of 35.5 per cent and 23 per cent for the Class A and Class B notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note class, a cash reserve account and excess spread.

This transaction is the first rated securitization of unsecured near prime consumer loans facilitated by Lending Club Corporation’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform.

In 2016 there have been two broadly distributed unrated transactions of near prime unsecured consumer loans whose origination has been facilitated by the Lending Club platform.

In October 2016 Lending Club announced it would begin to offer auto loans to borrowers, initially only in California, who are looking to refinance an existing loan. 

Comments

AltFi Amsterdam Summit 2018

AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.

5th November 2018