Online lending platform Funding Circle announced last week it completed its fourth securitization of funding. According to Funding Circle, the £232 million transaction is considered the largest ever securitization facilitated through its platform.
“The transaction was rated by two rating agencies, and its senior tranche was awarded an Aa3 / AA ratings by Moody’s and S&P respectively. On closing, the spread over 1-month Libor on the senior tranche was 120 basis points. The securitization forms part of Waterfall Asset Management’s £1 billion investment in Funding Circle loans announced at the end of last year. This commitment will support the growth of approximately 14,000 small businesses*, creating and sustaining thousands of new jobs across the UK.”
Funding Circle also reported that the £232 million deal is further recognition of the online lending model’s ability to open up deep pools of capital to small businesses, creating more choice and competition in the small business lending market. Sachin Patel, Chief Capital Officer at Funding Circle, stated:
“This latest securitisation is further proof that no matter what type of investor you are – from an individual with £1,000 to an asset manager with £1 billion – lending through Funding Circle can provide attractive, risk-adjusted returns.”
Patel went on to add:
“We look forward to continuing to work with Waterfall to support the growth of small businesses across the UK. SMEs play a crucial role in society by driving economic growth and employment, and remain at the heart of what we do every day.”