P2P fund a ‘Buy’, says analyst

Numis Securities Ewan Lovett Turner says the fund is looking attractive following a re-rating and securitisation.

The £808m P2P Global Investments trust has re-entered Numis Securities “Buy” list following the recent pricing of the latest securitisation of Zopa loans as well as a previous fall in its share price.

Ewan Lovett-Turner, analyst at Numis,  says the investment trust – which invests in the alternative credit space –  has made its “Buy” list once again following a fall in its share price of 10 per cent and the subsequent news of its successful securitisation of Zopa loans in the past few weeks which should improve its ability to carry out a shift in strategy to more asset-backed lending exposure.

The fund securitised a £216m pool of UK consumer loans originated by Zopa with the Class A notes (£172.8m) being Aa3 rated and priced at 70bps over one month Libor, compared to 145bps for the first Zopa securitisaiton  MOCA 2016-1, which priced in September of last year.

Lovett-Turner says the securitisation should help to reduce P2P GI’s cost of financing, and notes the pricing of the A notes is considerably cheaper than that achieved in last year’s securitisation.

 “We expect this to realise cash for P2P GI which will be able to be deployed in-line with its revised strategy. The portfolio is currently in transition, reducing US consumer exposure, in favour of Sterling denominated assets and to secured assets, ” he said.

Zopa has said in a statement that the tighter pricing of the latest deal, MOCA 2017-1, reflects the growing maturity of its loans as an asset class.

“This is a further demonstration of investor and market confidence in our origination and underwriting capabilities,” said Jaidev Janardana, CEO of Zopa last week. “Our ability to originate high quality loans continues to make the Zopa investment asset a distinctive and attractive one to retail and institutional investors alike,” Janardana said.