Marketplace Lending ABS Issuance Robust in 1Q2017

According to a PeerIQ report, marketplace lending (MPL) ABS issuance in the first quarter of this year was $2.9 billion, double the figure in the same period for 2016.

The $2.9 billion in issuance was spread across seven transactions that comprised of consumer, student, and SME collateralized deals. According to the report, one trend that emerged was the movement toward rated securitizations, as all deals in the quarter were assigned a rating, especially as the deal size has grown. In addition, the report notes that new issuance spreads continue to tighten and flatten, reflecting a healthy risk appetite in the capital markets.

An analyst at PeerIQ estimates that issuance in 2017 will be $11.2 billion and says that "we expect higher volatility from rising rates, regulatory uncertainty, and an exit from a period of unusually benign credit conditions. Platforms that can sustain low-cost stable capital access, build investor confidence via third party tools, and embrace strong risk management frameworks will grow and acquire market share."

SFIG's Marketplace Lending Committee covers the sector and is focused on regulatory and policy topics that impact the securitization market. SFIG has previously responded to the OCC's request for comment on "Exploring Special Purpose National Bank Charters for Fintech Companies," and in September 2015 commented on the U.S. Department of the Treasury's request for information on MPL. If you would like to join SFIG's Marketplace Lending Committee, please contact Michael.Williams@SFIndustry.org.

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