This morning, CommonBond announced its first securitization totaling $100M. The securitization comes with an expected investment-grade rating from Moody’s of Baa2 and from DBRS of A (High). This is the first time that Moody’s has issued an investment-grade rating for a first time issuing marketplace lending platform. Like several securitizations in this industry, investors will include institutional investors, banks, insurance companies, credit funds, and asset managers.
The most interesting aspects about CommonBond are their track record and borrower demographics. CommonBond, which was founded in 2013 has lent over $200M and has served over 2,000 borrowers. Of the loans they have originated, not one single loan has gone into default or experienced a 30-day delinquency. This is an impressive track record and there aren’t any companies I am aware of in this space with that kind of volume that can claim the same.
This a direct reflection of the high quality borrowers they lend to. They focus solely on graduate students, offering refinancing options to more than 700 graduate degree programs. Their average borrower statistics are equally as impressive as their track record, with the average borrower being 32 years old, having an income of $140,000 a year and a FICO score above 760.
CommonBond also supports education in other countries. For every fully funded loan on the platform, they fund the education of a student in need for a full year through Pencils of Promise.
It’s clear that several of the top student lenders are going the securitization route as a way to fund their loans. CommonBond has certainly proved itself as a platform that attracts high quality borrowers with a propensity to pay back their loans. You can learn more about CommonBond and their offerings in this post that discusses more details about their hybrid loan.