Kroll Bond Rating Agency Assigns Preliminary Ratings to SoFi Consumer Loan Program 2017-4

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two class of notes issued by SoFi Consumer Loan Program 2017-4 LLC (“SCLP 2017-4”). This is a $499.5 million consumer loan ABS transaction that is closing on July 5th, 2017.

This transaction represents SoFi Lending Corp.’s (“SoFi” or the “Company”) 10th 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 $137,050, a weighted average credit score of 739 and a weighted average monthly free cash flow of $5,063. 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 April 30, 2017, SoFi had originated approximately $5.8 billion in personal loans to roughly 165,000 different prime quality borrowers.

SoFi finances loans on its balance sheet through its $1.79 billion multi-year warehouse capacity, through whole loan sales.

Initial credit enhancement levels are 22.69% for the Class A Notes and 12.77% for the Class B Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A Notes), 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 at their Healdsburg, CA operations center. In addition, KBRA stressed the capital structure based on its stress case cash flow assumptions. KBRA reviewed 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, SoFi Consumer Loan Program 2017-4 New Issue Report, which was published today at www.kbra.com.

Preliminary Ratings Assigned: SoFi Consumer Loans Program 2017-4

Class         Preliminary Ratings         Principal Balance
A         AA (sf)         $443,000,000
B         A (sf)         $56,500,000

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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
Rosemary Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Jenny Ovalle, 646-731-2309
Associate Director
jovalle@kbra.com
or
Charlene Davis, 646-731-2439
Director
cdavis@kbra.com

Contacts

Analytical:
Kroll Bond Rating Agency
Eric Neglia, 646-731-2456
Senior Director
eneglia@kbra.com
or
Rosemary Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Jenny Ovalle, 646-731-2309
Associate Director
jovalle@kbra.com
or
Charlene Davis, 646-731-2439
Director
cdavis@kbra.com