SoFi has closed a $303 million+ securitization for refinanced student loans to graduate borrowers.
This is the second S&P rated securitization that SoFi has completed in the past 4 months and its third since December 2013. SoFi is the first and only marketplace lender to secure investment grade ratings from S&P and Moody’s for senior notes in a securitization. The senior notes were rated A by S&P, A2 by Moody’s and AA (low) by DBRS.
SoFi’s Chief Financial Officer, Nino Fanlo commented:
"After only three years in the market, we have expanded our product line beyond student lending to offer mortgages and mortgage refinancing. This rating allows us to continue to invest in our community of borrowers and finance other types of lending such as personal loans."
Morgan Stanley and Goldman Sachs led the transaction. Goldman Sachs, Barclays and Deutsche Bank distributed the senior notes. The $303 million transaction was backed by $336 million in collateral. In December 2013 SoFi issued the first securitization in the peer-to-peer sector with $151 million in senior notes backed by $168 million in collateral. In July 2014 SoFi issued $251 million in senior notes backed by $278 million in collateral. All rounds included retail and institutional investors.
In October the company reached the significant milestone of having funded $1 billion in loans. It also extended its product line to offer low down payment mortgages and mortgage refinancing to qualified borrowers in California, New Jersey, North Carolina, Pennsylvania, Texas, Washington D.C., and Washington state with plans to expand to additional states very soon.
As volumes for the world's top platforms reach a tipping point, an increasing number of different investible financial instruments are cropping up. Securitization enables a broader range of institutional investors to get involved in the peer-to-peer sector.