Kroll Bond Rating Agency Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2017-1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Prosper Marketplace Lending Issuance Trust 2017-1 (“PMIT 2017-1”). This is a $450.5 million consumer loan ABS transaction that is expected to close on May 24, 2017.

This transaction represents the sixth securitization collateralized by unsecured consumer loans originated through the online marketplace lending platform operated by Prosper Funding LLC (“Prosper” or the “Company”).

Founded in 2005, Prosper operates an online marketplace lending platform (the “Prosper Platform” or the “Platform”), where personal installment loans are offered to prime and near prime customers. The loans in PMIT 2017-1 were all underwritten as Standard Product Loans under the WebBank and Prosper Credit Guidelines. The loans on the Platform are originated by WebBank, a Utah chartered Industrial Bank. The Prosper Platform offers fixed rate, fully amortizing unsecured consumer loans ranging from $2,000-$35,000, terms of 3 years and 5 years. Origination fees of 1%-5% are charged to the borrower based on the borrower’s risk profile and loan term. The Prosper Platform facilitated originations of $1.6 billion, $3.7 billion and $2.2 billion in loans for the full year ending 2014, 2015 and 2016, respectively.

The transaction has initial credit enhancement levels of 43.90% for the Class A Notes, 31.05% for the Class B Notes and 10.40% for the Class C Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (in the case of the Class A and Class B Notes) and a reserve account funded at closing.

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 Prosper Platform’s historical gross loss data. KBRA also conducted an operational assessment of the Prosper Platform, as well as a review of the transaction’s legal structure. KBRA will also review the transaction documents, operative agreements and legal opinions for the transaction prior to closing.

Preliminary Ratings Assigned: Prosper Marketplace Issuance Trust, Series 2017-1

Class

  Preliminary Rating   Expected Initial Class Principal
A   A (sf)   $283,000,000
B   BBB (sf)   $64,250,000
C   B+ (sf)   $103,250,000

Please click here to view the report.

Related Publications:

U.S Consumer Loan ABS Rating Methodology for Asset-Backed Securities

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 Contacts:
Eric Neglia, Senior Director
eneglia@kbra.com, 646-731-2456
Jenny Ovalle, Associate Director
jovalle@kbra.com, 646-731-2309
Rosemary Kelley, Senior Managing Director
rkelley@kbra.com, 646-731-2337
Andrew Silverhardt, Analyst
asilverhardt@kbra.com, 646-731-2492

Follow us on Twitter!
@KrollBondRating

Contacts

Analytical Contacts:
Eric Neglia, Senior Director
eneglia@kbra.com, 646-731-2456
Jenny Ovalle, Associate Director
jovalle@kbra.com, 646-731-2309
Rosemary Kelley, Senior Managing Director
rkelley@kbra.com, 646-731-2337
Andrew Silverhardt, Analyst
asilverhardt@kbra.com, 646-731-2492

Follow us on Twitter!
@KrollBondRating