Ldger has completed its inaugural whole loan trading auction of Prosper Marketplace loans.
Ldger is a New York-based secondary market platform for marketplace lending assets. The platform provides both the ability to trade whole loans via an auction-based model and a structured finance solution – which allows for asset modeling, automated transaction execution and aggregation. The company has been bubbling away behind the scenes for a while, and completed its first auction on Wednesday.
That auction was for a portfolio of Ldger-owned Prosper loans, equal to less than $500k in value. The inaugural deal appears to have served as a something of a shop-window for prospective institutional clients, and also as a live test of the platform’s technology and auction process. Ldger has stated that its intention is to conduct bi-weekly auctions for a number of sellers and buyers within the industry. For now, the auction functionality supports only Prosper whole loans, but will expand to include further marketplace lenders in due course. Ldger CEO Hyung Kim offered comment:
"We were thrilled to have over 20 participants with just under 10 active bidders in our first auction. It was a solid validation for the need of a secondary market for Marketplace lending."
Kim went on to point to the storm clouds that have of late been gathering over the marketplace lending asset class, saying that such concerns only heighten the need for secondary market liquidity:
"Secondary market volume and liquidity, whether through whole loan trading or through structured securitized products, are the keys to continued growth in marketplace lending."
The provision of a functioning third-party secondary market within marketplace lending has been talked about often, but has not to date been effectively put into practice. The sheer diversity amongst the underlying assets that are originated by marketplace lending platforms presents a considerable hurdle to pricing. With a successful test-run under its belt, time will tell whether Ldger can surmount these difficulties – and in so doing become a pivotal cog within the US marketplace lending space.