The US economy generated a seasonally adjusted 138 K jobs last month (vs. expectation of 185K) bringing the jobless rate to 4.2% and another step closer to full employment. As inflation risks emerge, the Fed is widely expected to increase rates another 25 bps at the upcoming FOMC meeting on June 14th.
On the regulatory front, the US House will vote on a bill sponsored by Jeb Hensarling (R-TX) to reform and repeal portions of the landmark Dodd-Frank financial reform bill. In our conversations with bank executives, both at the community bank and large money center level, we find, surprisingly, mixed interest in rolling back Volcker rule, risk retention, and various consumer protection regulations. Banks have largely adapted their business lines to the new regulatory framework. However, we do find consistently strong interest across the banking sector for a paring back and simplification of capital and liquidity rules.
On the securitization front, student lending originator CommonBond priced its $232 Mn private student loan ABS. Goldman Sachs was the structuring lead, and co-leads include Barclays and Citi. Also, AB Alert reports that Lending Club is preparing a multi-seller deal which includes collateral from multiple originators including potentially loans from Lending Club’s own balance sheet. As PeerIQ noted in the summer of last year, we believe marketplace lenders that can offer whole loan investors a reliable path to liquidity and low-cost permanent financing can generate a competitive advantage.
Lending Club and Prosper recently updated their public loan performance data on most recent vintages. Accordingly, PeerIQ is pleased to present the PeerIQ Loan Performance Monitor. The monitor tracks interest rates, delinquency, and charge-off rates for both platforms across vintages and grades.
We are also pleased to introduce a new feature to the PeerIQ Analytics platform. Subscribers can now easily generate custom benchmarks to monitor whether their own loan portfolios or leading or lagging their comps. Feel free to contact us to learn more.
- PeerIQ CEO, Ram Ahluwalia, will speak at SCI’s 3rd Annual Marketplace Lending Securitisation Seminar on June 22nd in NYC.
- Debt and (Not Much) Deleveraging (McKinsey, 2015) Third of McKinsey’s 3-part report on debt and deleveraging.
- Lending Club Blueprint Emerging (AB Alert, 6/2/17) Lending Club reveals plans to price a subprime loan securitization in which it would contribute collateral alongside other whole loan investors.
- Unemployment Rate Falls to 16-Year Low, But Hiring Slows (WSJ, 6/2/17) U.S. added 138,000 jobs in May as jobless rate falls to 4.3%.
- Wage Growth Widely Misunderstood (ECRI, 5/8/17) With a series of rate hikes that are expected to continue, and real wage growth back down around zero, the Fed has demonstrated a misunderstanding of what drives real wage growth.
- LSE to Buy Citigroup’s Analytics, Fixed-Income Index Operations for $685 Million (WSJ, 5/30/17) Yieldbook and related index products were sold.
- Elastic Line of Credit Surpasses $200 Million in Outstanding Loans (BusinessWire, 5/31/17) Elevate announced that its Elastic product has surpassed $200 Mn in total principal outstanding, with more than 120,000 open accounts.
- Victory Park Capital fund toughens fees, exits Funding Circle US loans (Altfi, 5/31/17) Victory Park Capital’s latest quarterly report for their UK UCIT fund features continued emphasis on balance sheet investments.
- Peer-to-Peer Lending Giant Zopa Confirms £32m Fundraise (Altfi, 6/1/17) Proceeds will go toward build-out the firm’s technology and product offering in preparation for the submission of its banking license application later this year.
- SoFi and JetBlue Help Customers Managing Student Loans Earn Reward Travel (PR Newswire, 5/30/17) SoFi is in a reward points deal–perhaps taking a cue from the successful playbook of American Express.
- Another Warning Sign Flashes for Subprime Auto Loans (Bloomberg, 5/31/17) Subprime auto losses continue to increase, potentially due to changes in payment priority and reduced recovery values on auto assets.
- Mary Meeker’s 2017 Internet Trends Report: All the Slides, Plus Analysis (recode.net, 5/31/17) 355 slides and tons of information on gaming, healthcare, and internet growth.