NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of notes issued by LendingClub Issuance Trust, Series 2016-NP2 (LCIT 2016-NP2). This is a $101.75 million consumer loan ABS transaction that is expected to close on November 30, 2016.
This transaction is the first rated securitization of unsecured near prime consumer loans facilitated by LendingClub Corporation’s (“Lending Club” or the “Company”) proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com (the “Lending Club Platform” or the “Platform”). In 2016 there have been two broadly distributed unrated transactions of near prime unsecured consumer loans whose origination has been facilitated by the Lending Club Platform.
The Lending Club Platform was launched in 2007 and is operated by Lending Club. Lending Club has been a public company since its IPO in December 2014 and its stock is listed on The New York Stock Exchange under the symbol “LC”. The Lending Club Platform currently offers an array of products including unsecured personal installment loans to super prime, near prime and prime customers, patient and education financing and small business loans and lines of credit. In October 2016, the Company announced that the Platform would begin to offer auto loans to borrowers (initially only in California) who are looking to refinance an existing loan. Lending Club operates a true marketplace platform and does not usually use its balance sheet to purchase or invest in loans whose origination has been facilitated by the Platform. The Lending Club Platform currently offers whole loans or fractional loans to a diverse mix of investors including banks, institutional investors, managed accounts and self-managed individual investors.
The transaction has initial credit enhancement levels of 35.50% and 23.00% for the Class A and Class B notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note class, a cash reserve account and excess spread.
KBRA applied its General Rating Methodology for Asset-Backed Securities as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and the Lending Club’s historical gross loss data. KBRA also conducted an operational assessment of the Lending Club Platform, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.
For complete details on the analysis, please see KBRA’s Pre-Sale Report, LendingClub Issuance Trust, Series 2016-NP2 Presale Report, which was published today at www.kbra.com.
Preliminary Ratings Assigned: LendingClub Issuance Trust, Series 2016-NP2
| Class | Preliminary Rating | Expected Initial Class Principal | ||||||
| A | BBB(sf) | $85,340,000 | ||||||
| B | BB+(sf) | $16,411,000 | ||||||
Related Publications:
General Rating Methodology for Asset-Backed Securities
Online Consumer Marketplace Lending Update
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KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).
