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Eaglewood Capital Closes the First Securitization of Lending Club Loans

October 1, 2013 By Peter Renton 1 Comment

Views: 98

Last week I wrote about SoFi and their plans to create a securitization of their student loans. Little did I know that another company has actually beaten them to the punch and closed on the first securitization ever of p2p loans.

Eaglewood Capital who I profiled in January, closed on a $53 million securitization deal this past Friday making it the very first such deal involving loans originated by Lending Club. I caught up with Jon Barlow, the head of Eaglewood Capital, to find out more.

While Barlow was tightlipped about the details of this deal he did provide some background. This $53 million pool contained loans that were part of the Eaglewood Income Fund I, LP, the flagship fund of Eaglewood Capital. The $53 million number represented approximately half of the total assets in the fund that launched in November last year. The fund invests in loans based on their proprietary credit model with a weighted average interest rate in the 12-14% range, meaning a B-C grade average.

One of the interesting pieces that was mentioned in the press release is that the loans in this securitization were from borrowers with a weighted average income north of $90,000. That is well above average borrower income for all loans, which is around $70,000. The loans in this securitized pool were exclusively 36-month loans purchased on the whole loan platform at Lending Club.

A Large Insurance Company is the Primary Buyer

While there was no mention of exactly who the buyer was other press reports indicated it was a large insurance company. The pool of loans was not rated by any major credit ratings agency. Barlow also said that one of the advantages for Eaglewood and their investors with this deal was that it lowered their cost of borrowing and diversified their funding sources.

Eaglewood has been offering investors leverage on Lending Club loans in their main fund. Currently that leverage is slightly below 3 to 1. Eaglewood also offers unlevered separately managed accounts for investors who do not want to be in a fund structure but still want to take advantage of Eaglewood’s credit model.

Right now Eaglewood is dealing exclusively with Lending Club; there are no plans to add Prosper to the mix any time soon.

Barlow expects to put together more of these securitizations in the future. While there is no set timetable he thinks as the industry matures there will be more large investors looking to buy securitized pools of loans. And Eaglewood will be happy to put these deals together.

Here is a link to the New York Times article that broke this story and the official press release.

Filed Under: Peer to Peer Lending Tagged With: Eaglewood Capital, Lending Club, securitization

Views: 98

Trackbacks

  1. P2P Loans for September; Slower Growth for Lending Club in September; IsePankur Enters Finland; Securitization of P2P Loans - A New Era? | CommunityLoanCommunityLoan says:
    October 6, 2013 at 8:49 pm

    […] Lend Academy’s article gives some detail on the loan types in the package […]

    Reply

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LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

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