Kroll Bond Rating Agency Assigns Preliminary Ratings to Arcadia Receivables Credit Trust 2017-1
February 21 2017 - 4:12PM
Business Wire
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to
two classes of notes issued by Arcadia Receivables Credit Trust
2017-1 (“ARCT 2017-1”). This is a $213.137 million consumer loan
ABS transaction that is expected to close March 6, 2017.
This transaction is the first rated securitization of prime
unsecured consumer loans facilitated by LendingClub Corporation’s
(“Lending Club” or the “Company”) proprietary technology platform
supporting an online marketplace that connects borrowers and
investors by offering a variety of loan products originated by
issuing banks through the platform, www.lendingclub.com (the
“Lending Club Platform” or the “Platform”).
The Lending Club Platform was launched in 2007 and is operated
by Lending Club. Lending Club has been a public company since its
IPO in December 2014 and its stock is listed on The New York Stock
Exchange under the symbol “LC”. The Lending Club Platform currently
offers an array of products including unsecured personal
installment loans to super prime, near prime and prime customers,
patient and education financing and small business loans and lines
of credit. In October 2016, the Company announced that the Platform
would begin to offer auto loans to borrowers (initially only in
California) who are looking to refinance an existing loan. Lending
Club generally seeks to operate a true marketplace platform and
accordingly tries to avoid using its balance sheet to purchase or
invest in loans whose origination has been facilitated by the
Platform. The Lending Club Platform currently offers whole loans or
fractional loans to a diverse mix of investors including banks,
institutional investors, managed accounts and self-managed
individual investors.
The transaction has initial credit enhancement levels of 28.50%
and 13.50% for the Class A and Class B notes, respectively. Credit
enhancement is comprised of overcollateralization, subordination of
the junior note class, a cash reserve account and excess
spread.
KBRA applied its General Rating Methodology for Asset-Backed
Securities as part of its analysis of the transaction’s underlying
collateral pool, the proposed capital structure and Lending Club’s
historical gross loss data. KBRA also conducted an operational
assessment of the Lending Club 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.
For complete details on the analysis, please see KBRA’s Pre-Sale
Report, Arcadia Receivables Credit Trust 2017-1, which was
published today at www.kbra.com.
Preliminary Ratings Assigned: Arcadia
Receivables Credit Trust 2017-1
Class Preliminary Rating Expected
Initial Class Principal A BBB (sf)
$176,390,000 B BB- (sf) $36,747,000
Related Publications:
General Rating Methodology for Asset-Backed
Securities
About Kroll Bond Rating
Agency
KBRA is registered with the U.S. Securities and Exchange
Commission as a Nationally Recognized Statistical Rating
Organization (NRSRO). In addition, KBRA is recognized by the
National Association of Insurance Commissioners (NAIC) as a Credit
Rating Provider (CRP).
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