KBRA Assigns Preliminary Ratings to LendingPoint 2019-1 Asset Securitization Trust

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by LendingPoint 2019-1 Asset Securitization Trust (“LP 2019-1”), a consumer loan ABS transaction.

This transaction represents LendingPoint LLC’s (“LendingPoint”, the “Servicer” or the “Company”) first securitization of non-prime unsecured consumer installment loans (“loans”). LP 2019-1 will issue four classes of notes totaling $169.386 million (collectively, the “Notes”) with an expected closing date of August 30, 2019.

Founded in July 2014, LendingPoint, is a wholly owned subsidiary of LendingPoint Holdings LLC which is a wholly owned subsidiary of LendingPoint Consolidated, Inc. The Company issued its first direct to consumer (“DTC”) loan in 1Q 2015, and through May 31, 2019 has originated over $1.2 billion DTC loans with a current principal outstanding amount of $632 million. LendingPoint currently uses a hybrid origination model for its DTC loans, utilizing its state licenses to originate loans in DE, GA, UT, SD and CO and relationships with FinWise Bank (“FinWise”), a FDIC insured Utah state-chartered third-party originating bank, for all other states. LendingPoint maintains licenses or has the right to make consumer loans in 38 states and the District of Columbia. As of the July 31, 2019 statistical cutoff date, approximately 85.6% of the loans in LP 2019-1 were originated using LendingPoint’s bank originator, FinWise, with the remaining 14.4% originated by LendingPoint using its state licenses.

This transaction has initial credit enhancement levels of 37.60% for the Class A Notes, 23.85% for the Class B Notes, 11.20% for the Class C Notes and 5.50% for the Class D Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (in the case of the Class A, B and C Notes) and a reserve account funded at closing. The transaction includes a cumulative net loss amortization trigger, which if breached, will cause the transaction to enter a full turbo amortization while the trigger is in breach.

KBRA applied its Global Consumer Loan ABS Rating Methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and LendingPoint’s historical gross loss data. KBRA also conducted an operational assessment of the LendingPoint Program, 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 access ratings, reports and disclosures, click here.

Preliminary Ratings Assigned: LendingPoint 2019-1 Asset Securitization Trust

Class

Preliminary Rating

Expected Initial

Class Principal

A

A- (sf)

$112,151,000

B

BBB- (sf)

$24,517,000

C

BB- (sf)

$22,555,000

D

B- (sf)

10,163,000

Related Publications: (available at www.kbra.com)

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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 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.

Contacts

Analytical Contacts:

William Carson, Senior Director
(646) 731-2405
wcarson@kbra.com

Eric Neglia, Managing Director
(646) 731-2456
eneglia@kbra.com

Andrew Silverhardt, Senior Analyst
(646) 731-2492
asilverhardt@kbra.com

Michael Pettigrew, Analyst
(646) 731-1208
mpettigrew@kbra.com

Contacts

Analytical Contacts:

William Carson, Senior Director
(646) 731-2405
wcarson@kbra.com

Eric Neglia, Managing Director
(646) 731-2456
eneglia@kbra.com

Andrew Silverhardt, Senior Analyst
(646) 731-2492
asilverhardt@kbra.com

Michael Pettigrew, Analyst
(646) 731-1208
mpettigrew@kbra.com