NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Avant Loans Funding Trust 2017-A (“AVNT 2017-A”). This is a $192.6 million consumer loan ABS transaction that is expected to close on May 4, 2017.
This transaction represents Avant, Inc.’s (“Avant”, the “Servicer” or the “Company”) fourth rated securitization collateralized by a trust certificate backed by unsecured consumer loans originated through its online marketplace lending platform (“Avant Platform”). There have been four prior unrated securitizations, in which Avant or Avant’s institutional investors were the sponsors and the collateral was unsecured consumer loans originated under the Avant Platform.
Founded in 2012, Avant is located in Chicago, Illinois and operates an online lending platform. Personal installment loans are offered to non-prime consumers through the Avant Platform. Typical customers have an average annual income of $61,000 and average FICO score of 580 - 720. Loans have an original term of between 12 – 60 months, an original balance between $1,000 to $35,000 and a fixed APR between 5.95% - 36.00% depending on the borrower’s risk profile and loan term. Borrowers are not charged an application fee or any prepayment penalties, but in Q3 2016 Avant began charging an administration fee to borrowers. For the second half 2016, $269 million was originated through the Avant Platform, down from $1.2 billion (-78%) for the second half 2015.
Avant has a strategic partnership with WebBank, whereby WebBank, a Utah chartered industrial bank, originates loans through the Avant Platform. Avant utilizes technology and customized scoring models to assign credit grades. The Avant website is designed to provide customers with an easy interface and quick online loan decisions at competitive rates compared to traditional lending platforms.
Avant retains a portion of loans originated through the Avant Platform. Avant does not fund loans through a peer-to-peer platform, but instead partners exclusively with institutional investors for whole loan sales.
KBRA applied its U.S. Consumer Loan ABS methodology for Asset-Backed Securities as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and the Avant Platform’s historical gross loss data. KBRA also conducted an operational assessment of the Avant 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: Avant Loans Funding Trust 2017-A
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