NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Avant Loans Funding Trust 2017-B (“AVNT 2017-B”). This is a $232.648 million consumer loan ABS transaction that is expected to close on November 1, 2017.
This transaction represents Avant, Inc.’s (“Avant”, the “Servicer” or the “Company”) fifth 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. Beginning in Q3 2016 Avant began charging an administration fee to borrowers. Year to date ending September 30, 2017, $534 million had been originated through the Avant Platform, down from $1.1 billion (-52%) for the same period in 2016. However, the quarterly origination volume in 2017 has been increasing. The primary purposes for the loans are for debt consolidation, emergency expense, home improvement, or life events. As of September 30, 2017, approximately $4.2 billion in loans have been originated through the Avant Platform in the U.S.
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 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.
To read the pre-sale report, click here.
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Preliminary Ratings Assigned: Avant Loans Funding Trust 2017-B |
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| Class | Preliminary Rating | Expected Initial Class Principal | ||||
| A | A- (sf) | $142,887,000 | ||||
| B | BBB- (sf) | $56,525,000 | ||||
| C | BB- (sf) | $33,236,000 | ||||
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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).
