On Deck Capital made its debut in the securitization market today, pricing its inaugural $175 million deal.
OnDeck Asset Securitization Trust LLC Series 2014-1 is backed by a portfolio of small business loans originated by the sponsor. Deutsche Bank is the sole manager on the deal.
DBRS assigned preliminary ratings of BBB’ to $156.6 million of class A notes with a weighted average life of 2.32 years. The notes priced at a spread of 250 basis points over interpolated swaps curve, according to a person familiar with the deal. The 2.80-years, class B notes, rated BB’ by DBRS, were priced to yield 5.75%.
The portfolio is comprised of short term loans with a weighted average remaining term of approximately 8.4 months. The weighted average FICO score of the pool is 688 with 78.9% having a FICO score of at least 650.
OnDeck focuses on lending to small business customers that have historically been underserved by traditional financial institutions and may have experienced challenges obtaining affordable or timely financing, according to the DBRS presale report.Since starting in 2007, the company has made approximately 29,000 loans to approximately 18,000 customers with total proceeds of over $1 billion. OnDeck only engages in commercial lending and does not provide consumer loans.