Weekly Industry Update: Securitization Tracker 1Q2017 Preview

By Vy Phan

April 3, 2017

Several new investments and partnerships were announced last week. A leading China FinTech firm and wealth manager, CreditEase unveiled plans to invest $30 Mn in loans originated from OnDeck and LendingHome. Capital markets are re-opening to non-bank lenders. Elevate Credit, a non-prime consumer online lending platform, is expected to raise approximately $100 Mn with an IPO expected to price this week. Stay tuned this coming week as we release our 1Q2017 Securitization Tracker, covering issuance trends, regulatory developments, and our market insights and outlook. Conferences:

CEO, Ram Ahluwalia will discuss Bank and Non-Banks: Competition or Partnership at a LendingTimes event on, April 18 at 6:00 PM.

FRALLC’s Bank/Alternative Lender Strategic Partnership Summit on May 10-11 in New York. Ram will speak on the “Tapping Secondary Markets: Securitization & Liquidity” panel on Tuesday May 11 at 2:00PM.

PeerIQ in the News:

PeerIQ Takes a Deep Dive on Marlette Funding Trust (Small Business Lending Daily, 3/28/17)

Marketplace Lending News Roundup – April 1 (Lend Academy, 4/1/17)

Industry Update:

Federal Reserve Readies Plan for Balance Sheet (WSJ, 3/31/17) Markets expect central bank to raise short-term interest rates two more times in 2017 and then pause.

Appeals Court May Tackle `True Lender’ Debate Affecting Fintechs, Online Lenders (Bloomberg BNA, 3/30/17) A federal appeals court may offer guidance on “true lender” providing much needed regulatory clarity.

Elevate Credit Makes New IPO Push (WSJ, 3/27/17) Capital markets are re-opening to non-bank lenders and FinTech firms.

ReliaMax disrupting private student loan industry (Bankless Times, 3/28/17) ReliaMax capitalizes on the company’s 30 years of data to successfully insure private student loans.

Shadow Banking Is Getting Bigger Without Getting Better (Standard Examiner, 3/28/17) Recent study reveals market share of shadow banks in the mortgage market has tripled from 2007-2015, gaining a larger market share among riskier borrowers.

CreditEase Invests $30m via Online Lenders (AltFi, 3/27/17) CreditEase invests $30 Mn in OnDeck and LendingHome.

Activist Investor Pushes for New Strategy at On Deck Capital (WSJ, 3/31/17) Marathon Partners builds a sizeable investment position in ONDK.

Cost of Leverage ‘Collapsing’ in UK Marketplace Lending (Global Capital, 3/30/17) Funding costs are improving.

Maturing P2P Market Disrupted by Role of Banks (Global Capital, 3/30/17) Zopa’s introduction of its bank is part of a larger trend of online lending platforms shifting from a reliance on individual lenders to increasing use of institutional capital and now capital markets funding.

‘Deep Subprime’ Auto Loans Are Surging (Bloomberg, 3/28/17) Deep subprime loans have surged since 2010 and are translating to higher delinquencies.

Buyers of Auto Bonds Pushing Back (AB Alert, 3/31/17) Despite signs of weakening asset performance, prices of bonds backed by subprime auto loans and auto leases have remained high.

Lighter Fare:

Reports State that the Large Hadron Collider (LHC) Has Been Irreparably Damaged (Futurism, 4/1/17) A rounding error by a mathematician working at CERN's LHC resulted in "irreparable damage" to the Large Hadron Collider.