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Peer2Peer Finance News | January 17, 2019

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P2PGI re-enters Numis buy list thanks to Zopa securitisation

P2PGI re-enters Numis buy list thanks to Zopa securitisation
Marc Shoffman

P2P GLOBAL Investments (P2PGI) has been given a new buy recommendation from broker Numis thanks to the latest securitisation of Zopa loans in its portfolio.

Numis said it has put P2PGI on its buy list again, after its share price fell 10 per cent in the third quarter of 2017.

The investment trust is currently trading at a discount to net asset value of 22.2 per cent and has been in the process of shifting its exposure towards asset-backed loans.

The analyst described the latest securitisation of Zopa loans, completed this week by P2PGI, as “considerably cheap” and said it would help reduce the investment trust’s cost of financing and boost its revised strategy.

“We expect this to realise cash for P2PGI which will be able to be deployed in-line with its revised strategy,” the Numis note said.

“The portfolio is currently in transition, reducing US consumer exposure, in favour of sterling-denominated assets and to secured assets. A detailed strategy presentation is expected in early November.”

Read more: P2PGI sees “gradual improvement” ahead of Pollen Street merger

Zopa hailed the confidence shown in the P2P asset class earlier this week after its second securitisation was priced at significantly tighter spreads than last year’s transaction, at 145 basis points (bps) over one-month Libor, compared with 70bps in September 2016.

The securitisation was led by P2PGI, which will reinvest the proceeds back into its portfolio.

Read more: US storms hit P2PGI with payment delays