Earnest Prices $175 Million Securitization Rated by DBRS

Online lender Earnest has closed $175 million in refinanced student loans. The offering received a AA rating on the senior notes by DBRS which is one notch below the highest attainable rating of AAA. Earnest said the transaction was oversubscribed by 3X and traded at the tight end of market guidance. The securitization comes on the heals of a report that Earnest was up for sale and struggling to fund loans. The rumor was recently debunked by an Earnest spokesperson who told Crowdfund Insider that management was very much dedicated to operating the platform.

Earnest, founded in 2013, has now completed five securitizations of refinanced student loans since February 2016 for a total value of over $877 million.

In 15 months, Earnest says it has increased its rating on the senior notes from A to AA (high), a progression that often takes several years. Earnest believes this is indicative of the quality of the underlying collateral and the advancement Earnest has made as a programmatic issuer in the capital markets.

“This marks another strong securitization for Earnest, providing us the opportunity to welcome new investors and continue building our capital markets program. We’re thrilled at the appetite and investor confidence in our offerings,” said Louis Beryl, CEO and co-founder of Earnest.


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