KBRA Assigns Preliminary Ratings to LendingPoint 2020-1 Asset Securitization Trust
NEW YORK--(BUSINESS WIRE)--Feb 12, 2020--
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by LendingPoint 2020-1 Asset Securitization Trust (“LP 2020-1”), a consumer loan ABS transaction.
This transaction represents LendingPoint LLC’s (“LendingPoint”, the “Servicer” or the “Company”) third KBRA rated securitization of non-prime unsecured consumer installment loans (“loans”). LP 2020-1 will issue four classes of notes totaling $182.70 million (collectively, the “Notes”) with an expected closing date of February 21, 2020.
Founded in July 2014, LendingPoint, is a wholly owned subsidiary of LendingPoint Holdings LLC which is a wholly owned subsidiary of LendingPoint Consolidated, Inc. The Company issued its first direct to consumer (“DTC”) loan in 1Q 2015, and through December 31, 2019 has originated over $1.6 billion DTC loans with a current principal outstanding amount of $797 million. LendingPoint currently uses a hybrid origination model for its DTC loans, utilizing its state licenses to originate loans in DE, GA, UT, SD and CO and a relationship with FinWise Bank (“FinWise”), a FDIC insured Utah state-chartered third-party originating bank, for all other states. LendingPoint maintains licenses or has the right to make consumer loans in 38 states and the District of Columbia. As of the January 23, 2020 statistical cutoff date, approximately 91.25% of the loans in LP 2020-1 were originated using LendingPoint’s bank originator, FinWise, with the remaining 8.75% originated by LendingPoint using its state licenses.
This transaction has initial credit enhancement levels of 46.45% for the Class A Notes, 30.30% for the Class B Notes, 16.20% for the Class C Notes and 5.50% for the Class D Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (in the case of the Class A, B and C Notes) and a reserve account funded at closing. The transaction includes a cumulative net loss amortization trigger, which if breached, will cause the transaction to enter a full turbo amortization while the trigger is in breach.
KBRA applied its Global Consumer Loan ABS Rating Methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and LendingPoint’s historical gross loss data. KBRA also conducted an operational assessment of the LendingPoint Program, 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.
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Preliminary Ratings Assigned: LendingPoint 2020-1 Asset Securitization Trust
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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. KBRA is also 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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SOURCE: Kroll Bond Rating Agency
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