Weekly P2P Update: November 22, 2015

This past week, the Square IPO, with its 25% pre-launch price reduction and subsequent strong rally, dominated fintech headlines.  But there were plenty of other notable stories, including Victory Park Capital and KKR closing their securitization of Avant loans, DRB and SoFi securing ratings for forthcoming issuances, as well as Earnest’s Series B equity raise:

• Victory Park Capital and KKR Lead an Inaugural $175 Million Asset-Backed Securitization of Avant Consumer Loans (Press Release, 11/20/15)  Great milestone for Victory Park Capital, a PeerIQ client, closing their first securitization.  The $175M deal priced on Nov. 13 and closed this week.

• Moody's Assigns Provisional Ratings to DRB Prime Student Loan Trust 2015-D (Moody’s Research, 11/18/15) DRB’s 4^th securitization this year, this one of $332M in size and securing A3 rating on its senior tranche.

• Moody's assigns definitive ratings to SoFi Professional Loan Program 2015-D LLC (Moody’s Research, 11/18/15) SoFi’s new $536M issuance, with Aa2 rating on it’s senior-most class.

• Online Lender Earnest Raises $275 Million; Has Originated $400 Million In Loans This Year (Forbes, 11/17/15) Earnest, the student loan originator, raised $75M Series B equity round led by Battery Ventures and secured $200M in lending capital from New York Life and other insurance companies.  Great result for the Earnest team and interesting detail on ways that insurance companies are increasingly engaging in marketplace lending.

• FDIC Throws Water on the Marketplace Lending Phenomenon (Client Alert, Pepper Hamilton LLP, 11/16/15) Details on the impact of the FDIC’s Nov. 6th letter warning banks that all P2P loans purchased must conform to the bank’s own underwriting standards, among other requirements.  Banks are increasingly large purchasers of P2P loans and the diligence requirements will likely increase costs of doing so.  Certainly reinforces the need for the kind of collateral and risk assessment tools PeerIQ has developed.

• Lending Club Assuages Risk Concerns (FT, 11/16/15) Video interview with Lending Club CEO, Renaud Laplanche, on Santander’s departure as well as new bank partnerships.

• LoanDepot Defends Plan to Withdraw IPO, Citing Square (WSJ, 11/20/15) The large mortgage lender withdrew its IPO plans, citing market conditions.

Wish everyone a Happy Thanksgiving this week!