LendingPoint returns with $52.5 million consumer loan ABS

LendingPoint LLC, a provider of non-preferred consumer unsecured installment loans, is preparing to securitize approximately $52.5 million in its financial products. The Notes will be the first series issued by the LendingPoint Pass-Through Trust, Series 2022-ST1.

The transaction, known as LPPT 2022-ST1, will issue a class of bonds, which will likely receive a “BBB-” rating from rating agency Kroll Bond. Citibank is assuming several roles in the transaction, including certificate registrar, paying agent and certificate paying agent.

LendingPoint, which uses a hybrid origination model for its direct-to-consumer loans, and FinWise Bank are expected to originate the loans in LPPT 2022-ST1. However, by the statistical deadline of December 27, 2021, FinWise had issued all of the loans in the transaction, according to the KBRA.

LendingPoint will service the notes, while Vervent is the backup service. The LPPT 2022-ST1 notes benefit from two forms of credit enhancement – ​​overcollateralization and excess spread. KBRA notes that the required overcollateralisation amount is fully funded at closing and is equal to the higher of several conditions:

• or 30% of the balance of the series pool currently in progress

• 3% of the pool balance at the series deadline

• if an amortization event is corrected, then the overcollateralisation will be equal to the product of the percentage immediately preceding the correction of the default and

• the series pool balance on the last day of the corresponding collection period

The LPPT 2022-ST1 has a gross excess spread, before losses, of around 18.2%. This is based on an average contract rate of 21.7%, less 1% service charge, and an assumed weighted average coupon of 2.5%, KBRA said.

The KBRA notes that LendingPoint has a long charge-off policy on its loans, in which contracts are written off after 181 days overdue, which it changed on June 1, 2019. While the company adheres to a policy of imputation of 181 days, loans in transaction LPPT 2022-ST1 use a threshold of 121 days to set the overcollateralization requirements.

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