NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Avant Loans Funding Trust 2018-A (“AVNT 2018-A”). This is a $221.935 million consumer loan ABS transaction that is expected to close on May 31, 2018.
This transaction represents Avant, LLC’s (“Avant”, the “Servicer” or the “Company”) sixth rated securitization collateralized by a trust certificate backed by unsecured consumer loans originated through its online marketplace lending platform (“Avant Platform”). Avant Loans Funding Trust 2018-A (“AVNT 2018-A” or the “Issuer”) will issue three classes of notes totaling $221.935 million (collectively, the “Notes”). The proceeds from the sale of the Notes will be used to fund the reserve account and purchase loans from Avant’s warehouse facility and from whole loan buyers.
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 FICO scores ranging from 580 - 850. 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% - 35.95% depending on the borrower’s risk profile and loan term. Beginning in Q3 2016 Avant began charging an administration fee to borrowers. Administration fees currently range from 1.50% to 4.75% depending upon whether the borrower is issued under a refinance product. Year to date ending April 30, 2018, $238 million had been originated through the Avant Platform, up from $171 million (39%) for the same period in 2017. The primary purposes for the loans are for debt consolidation, emergency expense, home improvement, or life events. As of April 30, 2018, approximately $4.7 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 Global Consumer Loan ABS Rating 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.
|
Preliminary Ratings Assigned: Avant Loans Funding Trust 2018-A |
||||||||
| Class | Preliminary Rating |
Expected Initial
Class Principal |
||||||
| A | A- (sf) | $149,010,000 | ||||||
| B | BBB- (sf) | $47,500,000 | ||||||
| C | BB- (sf) | $25,425,000 | ||||||
Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report available here.
Related Publications: (available at www.kbra.com)
- Avant Loans Funding Trust 2018-A Pre-Sale Report
- Avant Loans Funding Trust 2018-A Peer Comparison
- Global Consumer Loan ABS Rating Methodology
CONNECT WITH KBRA
Twitter
LinkedIn
Download
the iOS App
YouTube
About KBRA and KBRA Europe
KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and 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.
