U.S. Bancorp in Minneapolis has launched a new asset-backed securities lending business as part of a broader effort to build out its services for middle-market and large corporate clients.
The business line will be housed in the company's fixed income and capital markets unit.
Stephen Philipson, the head of fixed income and capital markets at U.S. Bancorp, said that asset-backed securities lending “fits well with what our clients are looking for and [is] just another way for us to grow ... relationships."
U.S. Bancorp will provide financing, such as warehouse lines of credit, to clients that originate consumer and commercial loans, including credit card companies or captive auto finance companies. Once a client originates enough loans, it then hires a bank to bundle those loans into an asset-backed security, have that security rated and then sell it on the term market. This ultimately frees up capital for that client to make more loans.
The bank will mostly target existing clients that make consumer and commercial loans.
U.S. Bancorp will act as a warehouse lender and will also provide underwriting services, but will not take the lead managing or structuring those deals — yet, said Bo Weatherly, managing director of the new business.
He added, “We plan to go into that in a couple years’ time if the market is right.”
Weatherly joined U.S. Bancorp in 2016 and has more than 25 years of financial services experience. Before joining U.S. Bancorp, he worked for LendingTree, DeliverCareRx, Spartan Capital Advisors and Wachovia Securities.
He will oversee a team of seven people, all of whom were recruited specifically for the new group. The business and most of those new bankers will be based in Charlotte, N.C.
