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ABS East; Stripe’s Lending Arm; Madden Decision

By Vy Phan

September 15, 2019


Securitization professionals are gearing up for the ABS East Conference in Miami starting this Sunday Sep 22nd.

Marketplace lending ABS issuers are accelerating their deal activity to get ahead of potential recession talk concerns. Topics at the conference include GSE reform, the latest on the shift away from Libor, and promising developments in the non-agency mortgage market.

The most notable development this week is the news that $23 Bn payments company Stripe is launching a lending business. A new business unit, Stripe Capital, is a lending arm focused on financing customers’ businesses. Stripe intends to announce a bank partner that will fund loans. Stripe will capture a fixed percentage of daily sales.

Stripe is mirroring other payments companies that have since built lending capabilities – notably, Square and PayPal. Stripe believes it can compete in an already crowded small business lending market (OnDeck, Kabbage, Fundera, Funding Circle, etc.) due to its data & channel advantages stemming from its payments business.

In financing news, student loan fintech “College Ave” locked down a $300MM securitization and a AAA rating this week. The securitization was co-led by both Barclays and Goldman Sachs. Affirm, led by Max Levchin, is reportedly close to wrapping up a $1.5 Bn debt and equity financing with Thrive Capital and Spark Capital leading.

On the regulatory front, the FDIC and OCC weighed in on the Madden decision in a joint amicus brief. We recommend Peter Renton’s summary of the brief which is positive for lenders and investors.


Industry Update:

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