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Peer2Peer Finance News | November 17, 2018

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European Investment Fund and KfW back Funding Circle securitisation

European Investment Fund and KfW back Funding Circle securitisation
Marc Shoffman

FUNDING Circle’s latest securitisation has been priced at a tighter spread than its first with backers including the European Investment Fund (EIF) and German development bank KfW.

The £207m portfolio is issued by investment trust P2P Global Investments and has been priced at 75 basis points, compared with 220 basis points on the tranches issued in 2016.

It is the second securitisation of loans originated by the peer-to-peer lender and opens up the small business loan asset class to an even wider range of investors.

The senior tranche was awarded an Aa3, A (high) and AA rating from Moody’s, DBRS and Kroll respectively.

“This latest securitisation further validates the attractive, risk-adjusted returns that are being generated for investors in SME loans,” Sachin Patel (pictured), chief capital officer, at Funding Circle, said.

“Now investors of all shapes and sizes can support the growth of small businesses, which in turn drives much-needed job creation across the UK.

“This significant commitment by the EIF and KfW, alongside other key investors, will help thousands of small businesses access the finance they need to expand and grow.”

Deutsche Bank arranged the securitisation of 4,007 loans made through Funding Circle in six tranches worth £206.5m.

The average interest rate on the loans is 10.04 per cent and the average remaining term is 44.7 months.

All the loans are due to mature in December 2026.

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