The student-focused marketplace lending platform CommonBond has announced the completion of a $150m securitization of student loans. The deal involved two global investment banks – Barclays and Goldman Sachs. The former served as co-lead manager and structuring agent, with the latter acting as co-lead manager. The transaction received a rating of "A (high)" from the ratings agency DBRS. Purchasers of the assets were institutional investors, including the likes of insurance companies, banks, credit funds and asset managers.
Founded in November 2011 by three Wharton MBAs, CommonBond focuses on funding and refinancing student loans. The company provides users with access to a wide array of low fixed- and variable-rate student loan products to refinance existing student loans after graduation or to finance an MBA while in school.
This transaction is the second securitisation of student loans completed by the firm. Last June, CommonBond announced its inaugural securitization of graduate student loans – a $100m investment-grade transaction led by Morgan Stanley – which was rated Baa2 by Moody’s and A (high) by DBRS.
As recently as last January, the marketplace lender secured $275m of debt capital – courtesy of Barclays and Macquarie Capital, among others. This most recent fundraise takes CommonBond up to approximately $625m in debt and equity capital raised to date.
Morgan Edwards, Chief Financial Officer of CommonBond, offered comment:
"The strong reception in the capital markets to our second securitization is a further testament to the quality of CommonBond's portfolio, especially in today's uncertain market environment. As investors increasingly look toward high-quality assets, CommonBond stands out for its diligent underwriting and the fact that we have no defaults among our borrower base."