Softening investor demand has been a topic of many news outlets covering marketplace lending throughout 2016. But PeerIQ, who has the pulse on the marketplace lending securitization market, shared their most recent report titled Marketplace Lending Securitization Tracker Q2 2016 which highlights some positive trends.
Total volume for marketplace lending securitizations was $1.7 billion in Q2 2016, up 14.8% from Q1 2016. This brings the year to date total to $3.2 billion with Q2 2016 volume nearly hitting total 2015 volume of $1.8 billion. To date, marketplace lending platforms have issued $10.3 billion in securitizations. Not surprisingly, we have seen average deal size increase to $267 million this quarter. Back in 2013, average deal size was just $64 million.
Looking at the broader ABS market, securitizations outside marketplace lending experienced a 27% year over year slowdown compared to a 77% increase we’ve seen in marketplace lending securitizations over the last year.
A total of 6 deals were done in Q2 and spanned several marketplace lenders and categories. Here is the breakdown from Q2 2016:
- 3 student loan securitizations (Earnest, SoFi, CommonBond)
- 2 unsecured consumer loan securitizations (Avant, SoFi)
- 1 SME securitization (OnDeck)
Although SoFi has been active in the securitization deals in the past, Q2 2016 marked their first rated unsecured consumer loan securitization. They also received a AAA rating from Moody’s on their recent student loan transaction. The report highlighted ratings upgrades by DBRS on past securitizations of SoFi loans from 2013 and 2014. This compares to downgrades from Moody’s last quarter on several CHAI mezzanine bonds. Q2 2016 was the first quarter where all deals were rated by at least one rating agency, another sign of the attention these securitizations are getting. [Read more…]