NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Marlette Funding Trust 2019-3 (MFT 2019-3). This is a $339.247 million consumer loan ABS transaction.
This transaction represents the 12th securitization collateralized by unsecured consumer loans originated by Cross River Bank, under the Marlette Best Egg Platform and sold to Marlette Funding, LLC (“Marlette”) or its affiliate.
Founded in 2013 in Wilmington DE, Marlette operates an online marketplace lending platform, operating under the Best Egg brand (www.mybestegg.com) (the “Marlette Best Egg Platform” or the “Platform”). Over the last year, approximately $400 - $720 million of loans were originated through the Platform per quarter. Originations in 1Q19 totaled $568 million an increase of 39% YoY. Since inception, over $8 billion of loans have been originated through the Platform, and as of May 31, 2019, Marlette had approximately $200 million of loans on its balance sheet.
Marlette purchases and retains for its own balance sheet a portion of the loans originated through the Platform. The Platform does not offer Peer-to-Peer funding, but instead partners exclusively with institutional investors for whole loan sales. All whole loan purchasers receive a random allocation of originations. Loan retention from Cross River Bank, loan purchases by Marlette and whole loan purchases by institutional investors creates an alignment of interest among stakeholders. On the closing date, the depositor will acquire loans from several different Loan Sellers. The Loan Sellers are expected to include two Marlette Loan Sellers, Cross River Bank, two Affiliates of Goldman Sachs, two Colchis Loan Sellers and the Fund Loan Sellers.
The transaction has initial credit enhancement levels of 25.80% for the Class A Notes, 18.35% for the Class B Notes, and 9.95% 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 Global Consumer Loan ABS Methodology for Asset-Backed Securities and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and the Marlette Platform’s historical gross loss data. KBRA also conducted an operational assessment of the Marlette 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.
Preliminary Ratings Assigned: Marlette Funding Trust 2019-3 |
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Class |
Preliminary Rating |
Initial Class Principal |
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A |
AA (sf) |
$279,832,000 |
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B |
A (sf) |
$27,927,000 |
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C |
BBB- (sf) |
$31,488,000 |
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
