Kroll Bond Rating Agency Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2017-NP1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2017-NP1 (“CLUB 2017-NP1”). This is a $279.388 million consumer loan ABS transaction that is expected to close June 22, 2017.

This transaction is LendingClub Corporation’s (“LendingClub” or the “Company”) first sponsored transaction and the second rated securitization of near prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com (the “LendingClub Platform” or the “Platform”). All loans in this securitization are whole loans that were purchased through a pro-rata allocation of the near prime loans originated on the platform by seven third parties unaffiliated with LendingClub.

The LendingClub Platform was launched in 2007 and is operated by LendingClub. LendingClub has been a public company since its IPO in December 2014 and its stock is listed on the New York Stock Exchange under the symbol “LC.” The LendingClub Platform currently offers an array of products including unsecured personal installment loans to near prime and prime customers, patient and education financing and small business loans and lines of credit. In June 2016, LendingClub stopped its super prime program, and in October 2016, the Company announced that the Platform would begin to offer auto loans to borrowers who are looking to refinance an existing loan. LendingClub has historically sought to operate a true marketplace platform and did not typically use its balance sheet to purchase or invest in loans whose origination has been facilitated by the Platform. The Company now plans to use some capital to purchase loans and to contribute some collateral to its securitizations. The LendingClub Platform currently offers whole loans or fractional loans to a diverse mix of investors including banks, institutional investors, managed accounts and self-managed individual investors.

The transaction has initial credit enhancement levels of 52.25%, 40.00% and 17.50% for the Class A, Class B and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.

KBRA applied its U.S. Consumer Loan ABS Rating Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Lending Club’s historical gross loss data. KBRA also conducted an operational assessment of the Lending Club 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.

For complete details on the analysis, please see KBRA’s Pre-Sale Report, Consumer Loan Underlying Bond (CLUB) Credit Trust 2017-NP1, which was published today at www.kbra.com.

Preliminary Ratings Assigned: Consumer Loan Underlying Bond (CLUB)

Credit Trust 2017-NP1

      Class       Preliminary Rating       Expected Initial Class Principal
      A       A- (sf)       $162,415,000
      B       BBB (sf)       $41,235,000
      C       BB (sf)       $75,738,000
 

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
William Carson, 646-731-2405
Senior Director
wcarson@kbra.com
or
Lenny Giltman, 646-731-2378
Managing Director
lgiltman@kbra.com
or
Ed Pagano, 646-731-2449
Senior Analyst
epagano@kbra.com
or
Rosemary Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Haksun Kim, 646-731-2412
Director
hkim@kbra.com
or
Follow us on Twitter!
@KrollBondRating

Contacts

Analytical:
Kroll Bond Rating Agency
William Carson, 646-731-2405
Senior Director
wcarson@kbra.com
or
Lenny Giltman, 646-731-2378
Managing Director
lgiltman@kbra.com
or
Ed Pagano, 646-731-2449
Senior Analyst
epagano@kbra.com
or
Rosemary Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Haksun Kim, 646-731-2412
Director
hkim@kbra.com
or
Follow us on Twitter!
@KrollBondRating