Last week, marketplace lender Marlette Funding announced the closing of its fourth proprietary securitization. The transaction was worth an estimated $312 million, and it is the fourth securitization announcement since August of 2016 from Marlette Funding.
Marlette’s Best Egg personal loan products were backed across four classes of notes and one class of certificates. The transaction was underwritten by several different investors including Goldman Sachs, Deutsche Bank, and Citigroup. The notes were rated by Kroll Bond Rating Agency (KBRA), receiving ratings of AA, A, BBB, and BB.
As mentioned earlier, this is the fourth securitization transaction by Marlette Funding over the last 14 months.
Starting in August of 2016, a transaction for $205 million in Best Egg loan products was closed over three classed of notes and one class of certificates and was facilitated by Goldman Sachs. The notes received ratings of AAA, BBB, and BB by KBRA. The press release claimed that the transaction “sets a strong precedent for future transactions” which wasn’t far from the truth.
By March of 2017, another securitization transaction was closed, amounting to $333 million of the same personal loan products. The transactions covered three classes of notes and one class of certificates again. The notes were rated A, BBB, and BB by KBRA. Goldman Sachs, Citigroup, and Deutsche Bank underwrote the transaction.
Most recently in July, a further $369 million in Best Egg products were financed by the same three underwriting parties as in March. The transaction was covered over three classes of notes (rated AA, A, and BBB by KBRA) and one class of certificates.
With all that being said, Marlette Funding broke a milestone in 2017 by securitizing more than $1 billion in personal loans. These personal loans are a part of Marlette’s “Best Egg” loan product that was launched in 2014.
Marlette Funding is a financial services company that is trying to make the lending process easier for its customers by offering innovative loan products that are largely available online. With this in mind, Marlette Funding along with other fintech lenders stand in contrast to traditional, established banks, and recent data actually paints this in a positive light.
Fintech lenders such as Marlette Funding have gained significant recognition in the lending industry, especially the personal loan industry. A recent study covered by LendEDU showed that these online loan platforms accounted for over 30 percent of the personal loan market.
While personal loans as an industry has grown considerably in the last five years, it has also been observed that fintech lenders are taking a growing and larger portion of this growing market. Consumers are looking for loan solutions for big purchases and debt consolidation in an internet age that demands convenience. Tech platforms seem to be adapting to this demand by offering simpler, more accessible loan applications, making it easier for the consumer to find what they’re looking for.
Author: Andrew Rombach
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