NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four
classes of notes issued by SoFi Consumer Loan Program 2019-1 (“SCLP
2019-1”). This is a $480.7 million consumer loan ABS transaction.
This transaction represents SoFi Lending Corp.’s (“SoFi” or the
“Company”) 17th rated securitization collateralized by a portfolio of
unsecured consumer loans. SoFi currently originates personal loans
through its state licenses or complies with certain requirements where a
state lending license is not required.
Founded in 2011, SoFi is located in San Francisco, California and
operates an online lending platform. Personal installment loans are
offered to prime consumers through SoFi’s platform. Typical borrowers
with loans securitized in this collateral pool, have a weighted average
annual income of approximately $151,144, a weighted average FICO of 753
and a weighted average monthly free cash flow of $5,696. Loans typically
have an original term between 36–84 months, an original balance ranging
in size from $5,000 to $100,000 with fixed rates or variable rates
depending on the borrower’s risk profile and loan term. Borrowers are
not charged an origination fee or any prepayment penalties on the loans.
As of December 31, 2018, SoFi had originated approximately $13.8 billion
in personal loans to 360,000 different prime quality borrowers.
SoFi finances loans on its balance sheet through its $2.5 billion
multi-year warehouse capacity, through whole loan sales.
Initial credit enhancement levels are 33.46% for the Class A Notes,
25.96% for the Class B Notes. 16.15% for the Class C Notes and 8.91% for
the Class D Notes. Credit enhancement consists of overcollateralization,
subordination (in the case of the Class A Notes, Class B Notes and Class
C Notes), excess spread and a reserve account funded at closing.
KBRA analyzed the transaction using the Consumer Loan ABS Rating
Methodology published on March 28, 2017. KBRA’s consumer loan
methodology incorporates an analysis of: (1) the underlying collateral
pool, (2) the originator’s historical static pool data, segmented by
characteristics including credit quality and product type, (3) the
proposed capital structure for the transaction, (4) KBRA’s operational
assessment of the originator and servicer and (5) the legal structure,
transaction documents, and legal opinions.
In applying the methodology, KBRA analyzed SoFi’s static pool data and
the underlying collateral pool. KBRA performed an operational review of
SoFi at their Healdsburg, CA operations center and its servicing center
in Utah. In addition, KBRA stressed the capital structure based on its
stress case cash flow assumptions. KBRA will also review the operative
agreements and legal opinions for the transaction prior to closing.
Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1
|Class||Preliminary Rating||Class Principal|
To access the ratings, new issue report and disclosures, click here.
Related Publications: (available
Consumer Loan Program 2019-1 Pre-Sale Report
Consumer Loan Program 2019-1 Peer Comparison
Consumer Loan ABS Rating Methodology
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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, is 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.
Silverhardt, Senior Analyst
Kelley, Senior Managing Director