Big Deal on Horizon: Funding Circle Said to Be Planning Europe’s First P2P ABS

Funding Circle LogoFunding Circle, a small-business lending platform, hired Deutsche Bank AG as the sole  arranger of the first securitization of P2P loans in Europe, according to a person familiar with the matter told Bloomberg. The firm will meet investors in London April 18-20 to discuss a possible deal in pounds, said the person who isn’t authorized to speak publicly and asked not to be identified. The planned securitisation will be backed by £130m of loans and marketed early next week, noted FT.

“Up until now SMEs are very linked to the banking sector,” commented Moody’s VP Monica Curti to FT. “We do see some opportunity for the future of the securitisation of marketplace lending backed by SME loans.”

When Zencap merged into Funding Circle in October 2015, Funding Circle became a global crowdlender with a presence in the UK, the US, Germany, Spain and the Netherlands. Funding Circle has originated more than €2 billion worth of loans to SMBs.

The planned deal is an exercise in “price discovery for what is an esoteric asset class which has been lacking in Europe,” Aaron Baker, a London-based credit analyst at Banco Bilbao Vizcaya Argentaria SA, told Bloomberg. “I would expect more transactions to come with U.K. collateral.”

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