KBRA Assigns Preliminary Ratings to Avant Loans Funding Trust 2019-B

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Avant Loans Funding Trust 2019-B (“AVNT 2019-B”). This is a $328.104 million consumer loan ABS transaction that is expected to close on September 18, 2019.

This transaction represents Avant, LLC’s (“Avant”, the “Servicer” or the “Company”) ninth 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 2019-B (“AVNT 2019-B” or the “Issuer”) will issue three classes of notes totaling $328.104 million (collectively, the “Notes”) with an expected closing date of September 18, 2019. 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 primarily to non-prime consumers through the Avant Platform. Typical customers have an average annual income of $47,700 and FICO scores ranging from 580 to 720. Loans have an original term of between 24 – 60 months, an original balance between $2,000 to $35,000 and a fixed APR between 5.95% - 35.95% depending on the borrower’s risk profile and loan term. Beginning in 3Q16 the Avant Platform began charging an administration fee to borrowers. Administration fees currently range from 1.50% to 4.75% depending upon whether the borrower is issued a refinance product. In 1H19, $568 million was originated through the Avant Platform, up from $444 (28%) million in 1H18. The primary purposes for the loans are for debt consolidation, emergency expense, life event, or car repair. As of June 30, 2019, approximately $6.0 billion in loans had 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.

KBRA applied its Global Consumer Loan ABS Rating Methodology for Asset-Backed Securities and its Global Structured Finance Counterparty Methodology 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 2019-B

Class

 

Preliminary Rating

 

Expected Initial Class Principal

A

 

A- (sf)

 

$250,136,000

B

 

BBB- (sf)

 

$55,036,000

C

 

BB- (sf)

 

$22,932,000

To access ratings, reports and disclosures, click here.

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

Melvin Zhou, CFA, Director
(646) 731-2412
mzhou@kbra.com

Michael Polvere, Senior Analyst
(646) 731-3339
mpolvere@kbra.com

Contacts

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

Melvin Zhou, CFA, Director
(646) 731-2412
mzhou@kbra.com

Michael Polvere, Senior Analyst
(646) 731-3339
mpolvere@kbra.com