PeerIQ is pleased to release the 3Q 2016 tracker. Here are some highlights:
- Marketplace lending securitization remains a bright spot in the ABS market. Total issuance topped $2.4 billion this quarter—a record—and is up 41.1% from Q2, with cumulative issuance now totaling $12.7 billion. YTD issuance of the sector stands at $5.4 billion as compared to $3.0 billion from prior year, an 86% increase as compared to a 10% decrease in non-MPL ABS issuance.
- Although MPL origination volumes have declined at some platforms, ABS issuance is increasing as is the proportion of loans funded by ABS. The percentage of loans funded by ABS is over 50%.
- The movement towards rated securitizations at larger transaction sizes continues. All the deals issued in the third quarter were rated, with the exception of LCIT 2016-NP1. Further, the growth in average deal size continued, growing to $267 million in 2016 as compared to $64 million in 2013.
- New issuance spreads continued to tighten in—a friendly environment for securitization. Across all segments in MPL, Q3 2016 saw spread compression across each part of the capital structure, indicating strong investor appetite for MPL ABS paper in the market.
- We estimate $6.0 to $10.3 billion MPL ABS issuance for 2017. Goldman Sachs, Morgan Stanley, and Citi take top positions on the league tables.
- Differences in execution and losses are emerging across issuers. SoFi maintains a significant execution advantage over peer student lending originators, and remains the largest issuer in the category. PeerIQ expects 3 additional deals to breach loss triggers in the unsecured consumer installment category in the coming month
To access the full paper, click here.