Student lending platform on review for ratings boost

By Ryan Weeks on Monday 12 February 2018

Alternative Lending

Moody’s puts six tranches issued by CommonBond on review for upgrade.

Moody’s puts six tranches issued by CommonBond on review for upgrade.

One of the most prolific securitisation-machines in the fintech lending sector may be about to see its bonds upgraded.

Moody’s Investor Services has placed six tranches issued by CommonBond Student Loan Trust 2016-B, 2017-A-GS and 2017-B-GS on review for upgrade. The tranches are comprised of loans to students, and $488m of asset backed securities are affected by the review.

With the exception of the two tranches issued by the 2017-B-GS vehicle, all of the tranches have been upgraded previously.

This latest review is primarily due to lower expected operational risk associated with the transactions’ sponsor and administrator, CommonBond Inc., which has been in business since 2013, and which has issued five securitisations. Moody’s has also advised that performance has “been in line” with expectations, and is consistent with other student loan refinancing providers in the field. If net losses are lower than the ratings agency’s forecasts, the bonds will be upgraded.

CommonBond closed its largest securitisation to date in 2017 – a $248m transaction. The bonds received AA ratings from Moody’s and DBRS. 2017 also saw the platform launch new products, adding in-school loans for graduates and undergraduates. Its main competition within the fintech sector is SoftBank-backed SoFi, which recently appointed former Twitter exec Anthony Noto as its new CEO

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