SoFi Returns with $203M of Consumer Loan ABS

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Online lender Social Finance is marketing another $203 million of bonds backed by unsecured consumer loans.

Despite its name, SoFi Consumer Loan Program 2016-4 LLC is the actually the lender’s third rated transaction to date; the Series 2016-3 has yet to be sold.

SoFi’s first products were student loans; it launched consumer loans for prime borrowers in 2015. There was one prior unrated securitization, in which SoFi or SoFi’s institutional investors were the sponsors and the collateral was unsecured consumer loans. 

The trust will issue three tranches of notes with preliminary ratings from Kroll Bond Rating Agency. The $178 million senior tranche, which benefits from 20.5% credit enhancement, is rated ‘A’; a $7.8 million subordinate tranche with 17% credit enhancement is rated ‘BBB+’ and a $16.7 million subordinate tranche with 9.5% credit enhancement is rated ‘BBB-‘.

The collateral pool consists of 36, 60 and 84 months, fixed-rate and variable-rate, fully amortizing, unsecured consumer loans made to borrowers with credit scores in the range of 680-850. The weighted average credit score and net interest rate (after a discount) are 733 and 9.47% respectively. There is approximately a 14%, 31% and 55% split between 36, 60 and 84 month loans, respectively.

The loan pool is geographically diverse with the top three states based on current balance (CA, NY & TX) representing 30.70% of the total portfolio. In addition, all eligible loans will not be more than 30 days’ delinquent as of the pool cut-off date. The loan pool is three months seasoned.

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