ZOPA is planning to securitise more of its loans after its first issuance was oversubscribed, the peer-to-peer lender’s head of capital markets has said.
“The deal was oversubscribed and there seemed to be a strong market appetite,” Jonathan Kramer told Peer-to-Peer Finance News on the sidelines of the LendIt conference in London.
“It was a high quality order book. Not only was it oversubscribed but it was all real money accounts, rather than hedge funds.”
The £138m transaction, which was announced in late September, was led by London-listed investment trust P2P Global Investments, which owns the loans and is sponsoring the deal. It was arranged by Deutsche Bank.
It is the first ever securitisation of unsecured consumer loans in Europe and received stellar ratings from ratings agencies Moody’s and Fitch.
Kramer said that Zopa will “definitely” be looking to package up more of its loans and sell them off in tranches to institutional investors.
“Our ambition is that the Zopa asset is well known in the asset-backed securities community and that means repeat issuance of loans backed by Zopa,” he said. “So we’re hoping this is the first of more to come. I don’t think there will be another one in 2016 but I’d say yes in 2017.”
Kramer said that securitisation is “validation of the Zopa asset” due to the high levels of due diligence done by the various parties involved and that the next deal is likely to be bigger.
“I think there is appetite for a larger size from investors,” he said. “We were at the smaller end of what can get done, otherwise the economics just don’t make sense in terms of the cost of doing a securitisation. So I think there are benefits in making it larger.”