P2P and marketplace lending securitization enters the mainstream after strong growth

By Daniel Lanyon on 11th July 2017

P2P/Marketplace LendingAlternative Credit

The increasing size of quarterly issuance alongside involvement from a larger group of ratings agencies suggest institutions are more and more bullish

P2P and marketplace lending securitization enters the mainstream after strong growth

The increasing size of quarterly issuance alongside involvement from a larger group of ratings agencies suggests institutions are more and more bullish on the asset class. 

The second quarter of 2017 saw issuance of P2P and marketplace lending securitization reach $3bn worth of deals, representing a 76 per cent year-on-year growth rate, according to Peer IQ.

The period saw nine marketplace lending securitizations meaning to date cumulative issuance has reached $21.9bn across 92 deals. 

Platforms involved were SoFi, Prosper, Lending Club, Avant, CommonBond, Upstart, Earnest and Marlette. The average deal now stands at $358m for 2017.

Multi-seller club deals and self-sponsored deals emerged as a fresh trend at several platforms.

Alongside this trend, dealer and rating agency participation is gaining strong momentum with all deals being rated in the quarter.

Fitch rated its first Consumer MPL - Prosper’s PMIT 2017-1- indicating broadening acceptance across ratings agencies, Peer IQ said. Goldman Sachs, Morgan Stanley, and Deutsche Bank lead over 47 per cent of MPL ABS transaction volume. 

New issuance spreads also continued to tighten and flatten pointing to a 'credit friendly environment for securitization', Peer IQ added. 

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Companies in this Article:

Morgan Stanley
Lending Club
Avant
CommonBond
Prosper Marketplace
Upstart
SoFi