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TMCNet:  KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2

[September 12, 2018]

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2 ("CLUB 2018-P2"). This is a $270.30 million consumer loan ABS (News - Alert) transaction that is expected to close September 27, 2018.

This transaction is LendingClub Corporation's ("LendingClub" or the "Company") seventh rated sponsored securitization, third of 2018 and the fourth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub's 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. Overall, KBRA has rated eight other securitizations (LendingClub Issuance Trust, Series 2016-NP2, Arcadia Receivables Credit Trust 2017-1, Consumer Loan Underlying Bond Credit Trust, 2017-NP1, Consumer Loan Underlying Bond Credit Trust, 2017-P1, Consumer Loan Underlying Bond Credit Trust, 2017-P2, Consumer Loan Underlying Bond Credit Trust, 2017-NP2, Consumer Loan Underlying Bond Credit Trust, 2018-NP1 and Consumer Loan Underlying Bond Credit Trust, 2018-P1) whose origination was facilitated by the LendingClub Platform.

The LendingClub Platform was launched in 2007 and is operated by LendingClub. LendingClub 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 Platform currently offers an array of products including unsecured personal installment loans to super prime, prime and near prime customers, patient and education financing, auto refinance loans and small business loans.

The transaction has initial credit enhancement levels of 32.88%, 24.45% and 10.42% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.

KBRA applied its Global Consumer Loan ABS Rating Methodology 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, Consumer Loan Underlying Bond Credit Trust 2018-P2 Pre-Sale Report, which was published today at www.kbra.com.



Preliminary Ratings Assigned: Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2

    Class   Preliminary Rating   Expected Initial Class Principal  
      A       A- (sf)       $ 202,900,000      
      B       BBB (sf)       $ 25,300,000      
      C       BB (sf)       $ 42,100,000      
     

 

 

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC (News - Alert) Rule 17g-7, to provide a description of a transaction's representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA's disclosure for this transaction can be found in the report available here.

Related Publications: (available at www.kbra.com)

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.


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