Last week, P2P Global Investments and Zopa teamed up to work on Europe’s first securitization of unsecured consumer loans originated online. dedicated to investing in loans originated via marketplace platforms, and was arranged by Deutsche Bank.
“This is an exciting milestone in Zopa’s journey. The securitisation process has involved detailed scrutiny of our underwriting and servicing practices from both ratings agencies and investors,” stated Zopa CEO Jaidev Janardana. “The market reception validates the robustness of our platform and our prudent lending policies. It brings Zopa personal loans further into the public spotlight and expands the universe of people who can participate in peer-to-peer lending. This supports our mission of providing a fairer financial future to even more customers.”
To recap: the £138M ($179 million) transaction is backed by 27,137 loans to individuals, according to Moody’s Investors Service, with a weighted average seasoning of 10 months and a maximum loan term of five years. Deutsche Bank AG arranged the deal, branded “Marketplace Originated Consumer Assets 2016-1.” A securitization of loans originated through financial innovator Zopa has received the highest debut rating globally for any issuance backed by peer-to-peer loans, with a AA- rating from Fitch and Aa3 rating from Moody’s on the most senior notes.
“This transaction marks a positive step in enabling us to deliver on our objective to both diversify the sources and reduce the cost of our funding,” added MW Englewood Europe CEO and P2P GI Manager Simon Champ. “The funds raised by the issue will now be progressively deployed in line with the investment strategy and our intention remains to steadily increase our leverage ratio to 100%.”
Zopa pioneered the P2P lending model in 2005 and has now facilitated over £1.7 billion in unsecured personal loans to UK consumers, making it the largest European peer-to-peer platform by total lent, said the platform.