Earnest is marketing its fourth offering of bonds backed by refinance student loans, according to DBRS.
The $175 million deal, EARN 2016-D, will issue four classes of notes; the senior, class A-1 tranche is provisionally rated ‘AA’ by DBRS.
Earnest is an online lending platform focused on offering student loans and personal loans throughout the United States. It competes with lenders such as SoFi Lending Corp., Darien Rowayton Bank and CommonBond, Inc., offering a student loan refinancing product to borrowers who will graduate within six months of issuance of the loan or who have already graduated with an undergraduate or graduate degree and demonstrate a strong ability to repay their debt. As of September 30, 2016, Earnest had funded approximately $971 million of student loans to 13,100 borrowers.
The variable-rate Class A-1 Notes will be primarily secured by a group of variable-rate loans. The fixed-rate Class A-2 Notes will be primarily secured by a group of fixed-rate loans. The Class B and Class C Notes will be secured by both the fixed-rate and variable-rate loan groups
The Higher Education Loan Authority of the State of Missouri (MOHELA) acts as the hot back-up servicer for this transaction and will assume the servicing responsibilities of Earnest under certain circumstances.