Fintech lender CommonBond scores first AAA rating

By Ryan Weeks on Thursday 8 March 2018

Alternative Lending

The student lending platform has now securitised more than $1bn of its loans.

US student lending platform CommonBond has received its first ever AAA ratings. The platform’s latest securitisation, a $233.75m deal, has received provisional AAA ratings from both Moody’s and DBRS.

The transaction is CommonBond’s sixth to date and brings its total securitised loan amount to $1.22bn.

Moody’s is clearly getting more comfortable with CommonBond. The ratings agency recently placed six tranches issued by the student lender on review for upgrade, with $488m of asset-backed securities affected. This review was based primarily on lower expected operational risk associated with CommonBond as a sponsor and administrator of securitisations.

Now Moody’s has assigned provisional ratings of (P)Aaa (sf) to the senior tranches of notes issued by the CommonBond Student Loan Trust 2018-A-GS (CBSLT 2018-A-GS). Moody’s expects to see cumulative losses on the loan pool of 2.0 per cent. Once the securities have been sold, the ratings agency will endeavour to assign final ratings.

CommonBond’s biggest rival in the online student lending market is SoFi, which recently appointed former Twitter exec Anthony Noto as its new CEO. SoFi scooped its first triple A rating in 2015. 

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