As the first in what has been called an inevitable wave, it's rumored that Prudential Securities Inc. will bring to market the inaugural Internet deal as soon as this week.

According to sources, over $100 million in bonds will be backed by auto loans originated online by first-time issuer and Internet company PeopleFirst.com, whose Web site is located at www.peoplefirst.com.

The average credit score in the PeopleFirst loan pool is approximately 760, a figure derived from Fair Isaac Co.'s model of scoring borrower credit quality. The benchmark for prime is considered 680 or above.

"To my knowledge, there's nothing in the public arena with a FICO score at that level," said a source who has worked on several asset-backed deals.

What makes the deal a first-of-its-kind, however, is the process of lending, which was done 100% through on-line origination.

According to PeopleFirst's Web site, borrowers fill out applications online. When the applications are received, PeopleFirst accesses the credit bureau reports, which include the FICO ratings, and proceed to underwrite the loans on a real-time basis and give a response within fifteen minutes from when the application reaches their system.

If approved, the company sends out a draft or check allowing the customer to produce the equivalent of cash at the auto dealership. The customer can then negotiate with a new car dealer from a point of strength.

Barclays Capital is rumored to be co-managing the transaction. There will be a guarantee by Financial Securities Assurance. It is conceivable that this will be the first of regular securitizations to come from PeopleFirst, sources said.

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