Social Finance’s new $530 million consumer loan securitization, it’s third of the year, is the first to earn a double-A, from both Kroll Bond Rating Agency and S&P Global Ratings.
Both credit rating agencies assigned a preliminary double-A to $470 million in Class A notes, a notch higher than the single-A for the comparable trances of two prior 2017 securitizations of personal loans to its prime consumer borrower base.
The senior notes benefit from 22.97% credit enhancementand are backed by pool of online marketplace loans with an average balance of $34,899.
SoFi Consumer Loan 2017-3 will also issue a $60 million tranche of Class B notes to be rated A by S&P alonge; Kroll chose not to rate the subordainte tranche.
SoFi, a California lender best known as a student-loan refinancing lender, has now issued nine rated term asset-backed securitizations of unsecured consumer loans since launching the business line in 2014.
The loans in SCLP 201703 range from $5,000 to $100,000 on three-, five- and seven-year terms. Over 51% of the loans are seven-year terms, to borrowers with a weighted average income of $141,780, credit scores of 733 and free monthly cash flow of $5,201.
SoFi has originated a total of $5.4 billion in personal loans to 153,000 prime-quality borrowers, and as of March 31 had $1.78 billion of multi-year funding capacity from five banks to finance its personal loan originations.
Kroll normally caps marketplace lenders at A ratings because of limited data on asset performance, thin capitalization and the regulatory risk over interstate
But despite reports of increasing loan losses on
SoFi’s two previous deals this year have totaled $1.04 billion.
