This week’s PeerIQ Industry Update covers the great jobs report as nonfarm payrolls rose by 313,000 in February which caused the Nasdaq to hit an all-time high; CommonBond saw their first AAA rating by Moody’s and KBRA rated the senior bonds for OneMain’s latest deal at AAA, AA and A; PeerIQ also took a deep dive into the recent Amazon checking account news; they cover the benefits of the partnership, the significance of the deal and who might be next to enter the space. Source.
CommonBond closed their fifth and largest securitization which contained $248 million of refinanced student loans; the senior tranches were rated by Moody’s, S&P and DBRS and received ratings of Aa2, AA and AA (high) respectively; the deal was four times oversubscribed; according to David Klein, CommonBond CEO and co-founder, “Investor demand for CommonBond paper has never been greater. The strong market reception is a reflection of our pristine credit quality, continued ratings progression, and track record of consistent results. As a programmatic issuer, we look forward to continuing to bring consistently high performing bonds to the market, providing investors with world-class capital deployment options.” Source
Last week the New York Federal Reserve President, William Dudley, gave a briefing on household debt with a particular focus...
American Banker talks with David Klein, CEO of CommonBond about the fintech industry and his insight on the effects of a fintech charter; David Klein says company valuations across the industry are more realistic and the industry is maturing with more lending platform investments focused in later round fundraisings; explains the company's technology solution for employers adding student loan payment benefits; notes the company's default rate is zero; says the OCC fintech charter should give fintech companies better competitive market positioning and help to reduce costs. Source
There is no question that student lending is a massive market and several companies in the online lending industry have been...
The platform announced their latest securitization which is a $233.75 million deal; provisional ratings of AAA were given by both Moody’s and DBRS; this is CommonBond’s sixth transaction and they have now securitized a total of $1.22 billion in loans. Source
CommondBond has expanded its loan offerings to include undergraduates; its products now include loans for undergraduate and graduate students, refinancing options for graduates and employer student loan benefits; its newly launched in-school loans have variable APRs starting at 2.87% and fixed APRs starting at 5.50%; they will also include a range of repayment options; in combination with the new loan offerings CommonBond will also partner with Pencils of Promise to support the educational funding of a child in need for every new loan funded on the platform; additionally, CommonBond has announced new online tools for comparing loans; the firm is also building out its employer student loan benefits product which involves integration with Gradible, which it acquired last year. Source
CommonBond has created a March Debtness bracket to look at the payoff rates of this year's March Madness basketball teams; the bracket identifies the time it takes for students to pay off their student loans; UCLA is CommonBond's current March Madness winner with the fastest payoff rate at 4.42 years. Source
Morgan Edwards, chief financial officer at CommonBond gives an overview of the company and the student lending opportunity in this video from LendIt USA 2016. CommonBond provides student loan refinancing but one thing that makes them unique is their "1-for-1" model where they fund an education of a student in Africa for each student loan refinancing. As of April, the company had $625 million in capital committed with zero defaults and zero 30+ day delinquencies.
Morgan believes we are in a growth cycle and capital is here to stay although we may experience some ebb and flows through the cycle. He stated, "Capital flows where there is understanding and there is a return," and highlights several aspects that make this a favorable environment for student lending and marketplace lending broadly.
You can view the full video below:
CommonBond, one of the major players in online student loans announced their Series C equity round today. The total raise, which is over...