Kroll Bond Rating Agency Assigns Preliminary Ratings to Marlette Funding Trust 2016-1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Marlette Funding Trust 2016-1 (“MFT 2016-1”). This is a $184.90 million consumer loan ABS transaction that is expected to close on July 28, 2016. This transaction represents the second securitization collateralized by unsecured consumer loans originated by Cross River Bank, under the Marlette Best Egg Platform and sold to Marlette Funding, LLC (“Marlette”) or its affiliate.

Founded in 2013 in Wilmington DE, Marlette operates an online marketplace lending platform, operating under the Best Egg brand (www.mybestegg.com). Approximately $250 -$275 million of loans are originated to prime customers through the platform per quarter. As of May 31, 2016, the Company has $1.47 billion of loans under management.

Marlette is a balance sheet lender that retains a portion of the loans originated through the platform. The platform does not fund loans through a peer-to-peer program, but instead partners exclusively with institutional investors for whole loan sales. All whole loan purchasers receive a random allocation of originations. Loan retention from Cross River Bank, loan purchases from Marlette and whole loan purchasers from institutional investors creates an alignment of interest among stakeholders.

The transaction has initial credit enhancement levels of 28.00% for the Class A Notes, 19.25% for the Class B Notes and 10.50% for the Class C Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A and Class B Notes) and a reserve account funded at closing.

KBRA applied its General Rating Methodology for Asset-Backed Securities as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and the platform’s historical gross loss data. KBRA also conducted an operational assessment of the Marlette platform, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

Preliminary Ratings Assigned: Marlette Funding Trust 2016-1

Class       Preliminary Rating       Expected Initial Class Principal
A       A(sf)       $148,944,000
B       BBB(sf)       $17,976,000
C       BB(sf)       $17,976,000

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical:
Kroll Bond Rating Agency
Eric Neglia, 646-731-2456
Senior Director
eneglia@kbra.com
or
Lenny Giltman, 646-731-2378
Senior Director
lgiltman@kbra.com
or
Rosemary Kelley, 646-731-2337
Managing Director
rkelley@kbra.com
or
David Shin, 646-731-2459
Associate
dshin@kbra.com
or
Follow us on Twitter!
@KrollBondRating

Contacts

Analytical:
Kroll Bond Rating Agency
Eric Neglia, 646-731-2456
Senior Director
eneglia@kbra.com
or
Lenny Giltman, 646-731-2378
Senior Director
lgiltman@kbra.com
or
Rosemary Kelley, 646-731-2337
Managing Director
rkelley@kbra.com
or
David Shin, 646-731-2459
Associate
dshin@kbra.com
or
Follow us on Twitter!
@KrollBondRating