The guest list for LendingClub’s next securitization of near-prime consumer loans is a little more exclusive.

As in the past, LendingClub itself contributed only a small portion (7.55%) of the collateral for the Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1 transaction from loans it held on balance sheet, but this time only three unaffiliated parties were invited to contribute the remainder of the collateral.

LendingClub funds a large portion of its lending by selling whole loans to third-party investors; these investors can later turn around and sell the loans back to a securitization trust sponsored by LendingClub. In the previous transaction, seven whole loan investors contributed to the collateral pool, according to Kroll Bond Rating Agency.

CLUB 2018-NP1 will issue three classes of notes totaling $301.727 million. Credit enhancement for the senior $180.7 million tranche of Class A notes is 49.5%, down 30 basis points from the senior tranche of the previous transaction, which carried the same A-rating. However, enhancement for the BBB-rated Class B tranche has risen by 5 basis points to 37.4% and enhancement for the BB-rated Class C tranche has risen by 35 basis points to 15.35%, per Kroll.

In its presale report, Kroll said that LendingClub was able to offer lower credit enhancement for the senior notes because loss expectations for the transaction are slightly lower, due to a shift in the mix of collateral.

This shift is not obvious, however. The collateral pool in CLUB 2018-NP1 has a similar concentration of near-prime unsecured consumer loans in the lower-risk tiers compared to CLUB 2017-NP1. And CLUB 2018-NP1 has a weighted average FICO and weighted average coupon of 639 and 26.96%, respectively. That’s also in line with CLUB 2017-NP2, which had a weighted average FICO of 639 and a weighted average coupon of 26.98%.

The deal has approximately 90.21% and 9.79% of 36-month and 60-month loans, respectively and is geographically diverse with the top three states based on current balance (California, Texas and Florida) representing 28.64% of the collateral pool. As of Feb. 14, 2018, all of the loans are current and have made their first payment.

Kroll’s presale report also highlighted some recent developments at LendingClub. The company reported the highest revenue in its history of $157 million for the fourth quarter of 2017 and $574.5 million for the full year, driven primarily by a higher volume of loan originations. However, net loss widened to $154 million in 2017 from $146 million in 2016, in part due to the class action litigation settlement related to a 2016 scandal that led to the ouster of its founder and CEO.

Kroll expects the company to continue to have higher expenses in the near term as it addresses remaining legal, compliance and regulatory matters.

Nevertheless, the rating agency believes that LendingClub has enough liquidity for the next 12 months, based on the $401.7 million in cash available for immediate liquidity, cash flow from operations and the ability to reduce lending, if necessary.

As of Dec. 31, 2017, LendingClub held $613.7 million in loans on its balance sheet, of which $242.3 million were being held for upcoming securitizations and $359.4 million were held in CLUB 2017-P2, LLC and financed by term borrowings (a prior securitization).

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