LendingClub Corp (NYSE:LC) reported that it has completed a first-of-its-kind deal in marketplace lending, a whole loan deal formed as a tradeable, pass-through equity named a CLUB Certificate. This initial milestone deal amounted to $25 million with an institutional investor looking for a liquid vehicle with which to use the consumer credit asset class.
The CLUB Certificate deal comprised of whole loans formed as a pass-through security. This instrument trades in the OTC market with a CUSIP and is proficiently cleared through the DTCC. Scott Sanborn, the CEO of LendingClub, expressed that this achievement is a perfect instance of company’s innovation to fulfill the needs of their consumers on both aspects of the platform. They are using all of the capabilities they have advanced to fast react to the requirements of both their borrowers as well as diverse investor base.
Patrick Dunne, the Chief Capital Officer of LendingClub, expressed that by the latest approach, they have closed an unprecedented deal in marketplace lending. The deal offered efficient access to their asset class in a product that fulfilled the investor requirements in a single fixed income security that provides the potential for increased liquidity. By incessantly innovating on products, the company will further broaden and deepen investor access next year and beyond through different new structures and products.
For the deal, Consumer Loan Underlying Bond Certificate Issuer Trust I, a Delaware statutory trust, fixed a series of the Master Trust. LendingClub contributed specific loans to the Series Trust, as well as such Series Trust released a certificate collectively exhibiting 100% of the entire beneficial stake in such Series Trust to the Depositor. The Depositor then offered 95% of the Certificates to the respective institutional investor.
In the last trading session, the stock price of LendingClub declined more than 15% to close the day at $3.59.