LendingClub (LC) Closes First Self-Sponsored Securitization
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LendingClub (NYSE: LC), America's largest online marketplace connecting borrowers and investors, today closed its inaugural self-sponsored securitization deal. The Consumer Loan Underlying Bond (CLUB) NP Credit Trust 2017-NP1 (CLUB 2017-NP1) issued $279.4 million in notes backed by consumer loan assets facilitated through the LendingClub platform. The transaction marks the start of LendingClub's securitization program as Sponsor, Servicer and Administrator. LendingClub expects to sponsor programmatic securitizations and to use the CLUB structure for future transactions. This is the fifth securitization backed by consumer loan assets facilitated through the LendingClub platform and the third rated securitization of such assets overall.
"We are pleased to debut our securitization sponsorship capability. It allows us to expand access to large scale, long term investors," said Scott Sanborn, CEO of LendingClub. "The incredible demand for the assets we facilitate is a strong indicator of investor confidence in the LendingClub brand and positions us well for future growth."
LendingClub anticipates that programmatic use of the CLUB structure could provide institutional ABS investors with consistent access to securitized assets facilitated through its platform, standardization, consistency, and a more efficient means of financing for the long-term. The transaction was rated by Kroll and includes $162.4 million of Class A notes rated "A- (sf)", $41.2 million of Class B notes rated "BBB (sf)" and $75.7 million of Class C notes rated "BB (sf)" backed by approximately $337 million of collateral. Each tranche of notes was oversubscribed by a diverse set of investors, most of whom were new to investing in assets facilitated by LendingClub. Citi and JP Morgan acted as lead underwriters. BNP and Jefferies acted as co-managers.
"I'm very pleased with our execution. We're broadening our platform to tap into a large and liquid ABS market and with this deal we've reached 20 new investors, including insurance companies and large asset managers who are looking for new ways to access the platform," said Patrick Dunne, Chief Capital Officer of LendingClub. "This transaction also demonstrates a capital markets financing alternative for the portfolios of our existing investors, which may provide better pricing transparency and enhanced liquidity."
The CLUB 2017-NP1 transaction comes as LendingClub is seeing oversubscription from its diverse investor base for the assets it facilitates and an improved investor experience.
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