OnDeck Prices $250m Securitisation

By Ryan Weeks on Thursday 28 April 2016

Alternative Lending

Leading small business lender OnDeck has priced a $250m securitisation.

The securitisation will consist of two classes of note. The Class A Notes will consist of $211.5m of principal, with the Class B Notes comprised of $38.5m. The Class A Notes have been priced with an annual yield to expected maturity of 4.250%, with the Class B Notes priced at 7.754%. OnDeck expects both sets of Notes to be rated at closing by S&P and DBRS.

Howard Katzenberg, Chief Financial Officer at OnDeck, offered comment:

"We believe the successful pricing of our securitization demonstrates the strength of our hybrid funding model, which includes warehouse funding, securitizations and whole loan sales. This is another example of how our hybrid model gives us the flexibility to adjust our loan financing mix based on changes in financing conditions. This new securitization facility will provide us with even more capital to lend to small businesses at competitive rates."

The Notes are being issued by OnDeck Asset Securitization Trust II LLC – which is a wholly-owned subsidiary of OnDeck. Net proceeds of the offering will be used by the issuer to purchase a revolving pool of small business loans from the OnDeck platform.

OnDeck operates a hybrid lending model which involves both funding loans off its own balance sheet and also through an institutional marketplace sales programme. The securitisation route represents yet further diversity for the platform. This latest deal will be OnDeck’s second securitisation, the first being a $175m offering from May 2014 (according to PeerIQ’s latest Marketplace Lending Securization Tracker). 

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