SoFi Set for Securitization Spike

By Ryan Weeks on Friday 19 June 2015

Alternative Lending

The prolific student lending force that is SoFi is eyeing up over $1bn of securitizations in Q3 2015.

SoFi hit the headlines last week after successfully completing a $412m securitization of marketplace lending loans – both the largest volume-wise and highest-rated deal of its kind to date. Moody’s, Standard & Poor’s and DBRS gave the highest rated senior notes Aa2/A/AA (high) respectively. The full breakdown from that transaction:

  • $147m of floating rate A-1 notes
  • $235m of fixed rate A-2 notes
  • $29m of Class B bonds.

The platform has completed 5 securitizations of refinanced student loans to date, worth over $1.55bn in total. SoFi appears to be hinting that it may soon look to fuel securitization hunger using different product types, such as mortgages, or consumer loans, both of which are offered by the platform alongside its bread-and-butter form of student lending.

SoFi has been a pioneer in the securitization game, completing its first rated package of loans in 2013. The platform also claimed the title of first marketplace lender to secure investment grade ratings from S&P from Moody’s for senior notes in a securitization.

A trail of marketplace lenders have followed in SoFi’s wake – including larger platforms by cumulative transactions, such as Prosper – which closed a £327m deal in late January with the help of BlackRock Financial Management. Indeed, SoFi competitor and fellow student lender CommonBond securitized a strongly rated $100m package of loans just a few short weeks ago. 

Nino Fanlo, SoFi’s CFO and COO, commented on the platform's plans:

"Investor response to the high quality of our member base and loan portfolio speaks for itself. We're pleased to be leading marketplace lenders to mainstream capital markets and their most efficient outcomes."

"Transactions like these help enable the firm to continue its fast growth across product development, member servicing and staff. Our goal is two-fold: to appeal to the largest universe of buyers and ensure we are the financial services destination for high achieving professionals.  Our mission is to assure that our select customers enjoy premium products and services."

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