SoFi Bank is returning after a two-year absence to sponsor the sale of $697.6 million in asset-backed securities (ABS), securing the bonds with fixed-rate, amortizing unsecured consumer loans made to highly qualified borrowers.
The SoFi Consumer Loan Program, 2025-1, will sell the bonds through four tranches of classes A, B, C and D notes, and all with a maturity date of Feb, 27, 2034, according to Fitch Ratings and Morningstar | DBRS. The deal is expected to close on February 28.
SoFi started out offering student loan refinancing products, but it eventually expanded to providing mortgages and consumer loans. While it uses a third-party servicer for both of those product types, it services its entire consumer loan portfolio, DBRS said. Systems & Services Technologies is on the deal as the backup servicer.
One plus: a huge majority of borrowers in the pool, 88%, make automated payments, which increases payment capture rates and reduces SoFi's processing costs, DBRS said.
Notes have credit enhancements of 26.3%, 18.7%, 12.8% and 8.4% on classes A, B, C and D, respectively. DBRS puts its cumulative net loss assumption at 7.53%, and Fitch says it sets the transaction's base case default assumption at 7.18%.
SCLP 2025-1's structure includes a reserve account equaling 0.50% of its initial aggregate principal amount. Overcollateralization, initially equal to 8.02% of the collateral pool balance and subordination, also helps keep the notes' repayment on track.
BofA Securities is the deal's underwriter.
Fitch assigns ratings of AAA, AA, A and BBB+ to classes A, B, C and D notes. DBRS assigns AAA, AA and A to classes A, B and C notes.
The current deal has 23,714 loans in the underlying pool, the second-highest count the program has come out with since the 2019-4 series. The loans have a weighted average (WA) credit score of 745, and a WA gross interest rate of 13.42%. Borrowers are also high income, with a WA income of $161,833.
