LendingPoint Launches $ 400 Million ABS

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A pool of consumer loans secures the LendingPoint 2021-B Asset Securitization Trust, a deal that will offer investors $ 400 million in notes. The Trust will adhere to a more conservative write-off policy when determining when certain forms of credit enhancement will apply.

Regarding LendingPoint’s approach to handling billed accounts, the trust will be relying on an older benchmark. In June 2019, the company extended its imputation window to 181 days from 121 days, estimating that the longer period allows it to recover 10% of additional loans, according to the Kroll Bond rating agency.

LendingPoint 2021-B, however, uses the old 121-day threshold as the default definition to determine overcollateralisation requirements and cumulative net loss (CNL) triggers, KBRA said. The rating agency added that it was relying on the more conservative definition of write-off to develop its loss curve for the trade.

Credit Suisse and Guggenheim Securities are the first buyers of the notes in the transaction, for which LendingPoint LLC is acting as sponsor and manager, KBRA said. Vervent, Inc., a company in business for 30 years, is the backup repairer for the transaction.

The underlying loans have a Weighted Average Coupon (WA) of 21.1%, an initial WA term of 48 months, and a WA seasoning of only two months. Borrowers have a WA FICO score of 664.

LendingPoint also has the option to substitute or redeem a past due or written off loan, but only if the exchange occurs within 30 days of the date the loan became problematic.

In a credit challenge, KBRA noted that up to 40% of the trust’s total receivables balance could be acquired during the 90-day pre-financing period after the closing date. As of the closing date, the transaction is expected to have approximately 19,880 loans, representing a collateral balance of approximately $ 253 million in receivables. Assets acquired during the pre-financing period must meet certain eligibility criteria and concentration limits. The criteria limits include a minimum 25% loan renewal, in addition to being of LendingPoint quality and having a minimum weighted average interest rate of 20% per annum.

KBRA plans to award “A-” to the $ 278 million Class A Notes; “BBB-” to the $ 41.1 million Class B Notes; “BB-” to $ 63.1 million Class C Notes and “B” to $ 16.8 million Class D Notes.

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