NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to one class of notes issued by SoFi Consumer Loan Program 2017-3 LLC (“SCLP 2017-3”). This is a $530 million consumer loan ABS transaction that is closing on May 18, 2017.
This transaction represents SoFi Lending Corp.’s (“SoFi” or “the Company”) ninth rated securitization collateralized by a portfolio of unsecured consumer loans. SoFi currently originates personal loans through its state licenses or complies with certain requirements where a state lending license is not required.
Founded in 2011, SoFi is located in San Francisco, California and operates an online lending platform. Personal installment loans are offered to prime consumers through SoFi’s platform. Typical borrowers with loans securitized in this collateral pool, have a weighted average annual income of approximately $141,780, a weighted average credit score of 733 and a weighted average monthly free cash flow of $5,201. Loans typically have an original term between 36–84 months, an original balance ranging in size from $5,000 to $100,000 with fixed rates or variable rates depending on the borrower’s risk profile and loan term. Borrowers are not charged an origination fee or any prepayment penalties on the loans. As of March 31, 2017, SoFi had originated approximately $5.4 billion in personal loans to roughly 153,000 different prime quality borrowers.
SoFi finances loans on its balance sheet through its $1.78 billion multi-year warehouse capacity, through whole loan sales.
Initial credit enhancement levels is 22.97% for the Class A Notes. Credit enhancement consists of overcollateralization, subordination, excess spread and a reserve account funded at closing.
KBRA analyzed the transaction using the U.S. Consumer Loan ABS Rating Methodology published on March 28, 2017. KBRA’s consumer loan methodology incorporates an analysis of: (1) the underlying collateral pool, (2) the originator’s historical static pool data, segmented by characteristics including credit quality and product type, (3) the proposed capital structure for the transaction, (4) KBRA’s operational assessment of the originator and servicer and (5) the legal structure, transaction documents, and legal opinions.
In applying the methodology, KBRA analyzed SoFi’s static pool data and the underlying collateral pool. KBRA performed an operational review of SoFi in June 2016 at their Healdsburg, CA operations center. In addition, KBRA stressed the capital structure based on its stress case cash flow assumptions. KBRA will review the operative agreements and legal opinions for the transaction prior to closing.
Preliminary Ratings Assigned: SoFi Consumer Loans Program 2017-3
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