Kroll Bond Rating Agency Assigns Preliminary Ratings to SoFi 2016-5 Consumer Loan Program



NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two categories of tickets issued by SoFi Consumer Loan Program 2016-5 LLC (“SCLP 2016-5”). This is a US $ 213.64 million consumer loan ABS transaction that is expected to close on November 18, 2016.

This transaction represents SoFi Lending Corp. (“SoFi“or the”Society”) A sixth-rating securitization secured by a portfolio of unsecured consumer loans. SoFi currently grants personal loans through its state licenses or complies with certain requirements when a state lending license is not required. There was an earlier unrated securitization, in which SoFi or SoFi’s institutional investors were the sponsors and the collateral was unsecured consumer loans.

Founded in 2011, SoFi is located in San Francisco, California, and operates an online lending platform. Personal installment loans are offered to privileged consumers through the SoFi platform. Typical borrowers whose loans are securitized into this collateral pool have a weighted average annual income of approximately $ 139,162, a weighted average credit rating of 734, and a weighted average monthly free cash flow of $ 5,053. Loans generally have an initial term of between 36 and 84 months, an initial balance ranging from $ 5,000 to $ 100,000 with fixed rates or variable rates depending on the risk profile of the borrower and the length of the loan. Borrowers are not charged any origination fees or prepayment penalties on loans. As of September 30, 2016, SoFi had provided approximately $ 3.3 billion in personal loans to approximately 87,000 different senior borrowers.

SoFi finances loans on its balance sheet using its multi-year warehouse capacity of $ 1.7 billion. SoFi has retained a residual 5% stake in the previous securitizations by holding a portion of the Certificates, but will not do so for this transaction.

The initial credit enhancement levels are 25.20% for Class A Notes and 15.05% for Class B Notes. Credit Enhancement consists of overcollateralisation, subordination (in the in the case of Class A notes), a margin surplus and a funded reserve account at closing.

KBRA applied its general rating methodology for asset-backed securities as part of its analysis of the collateral pool underlying the transaction, the proposed capital structure and historical SoFi gross loss data. KBRA also conducted an operational assessment of SoFi’s platform, as well as a review of the legal structure of the transaction and transaction documents. KBRA will review the operational agreements and legal opinions of the transaction prior to closing.

For more details on the analysis, please see KBRA’s pre-sale report,
2016-3 SoFi Consumer Loan Program Presale Report, which was posted today at

Preliminary Ratings Assigned: SoFi 2016-5 Consumer Loan Program

To classify

Preliminary assessment

Capital balance


A + (sf)

$ 188,267,000


BBB + (sf)

$ 25,378,000

About the Kroll Bond rating agency

KBRA is registered with the United States Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). Additionally, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).


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