A SECOND securitisation of Funding Circle loans has been unveiled, which will boost the portfolio of the P2P Global Investments (P2PGI) fund.
Deutsche Bank has said it is arranging a securitisation of 4,007 loans made through the peer-to-peer business lending platform 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.
The P2PGI investment trust holds the loans in its portfolio and will use the securitisation vehicle to reduce its cost of funding.
This is P2PGI’s first securitisation of Funding Circle loans, but it was involved in consumer lender Zopa’s previous two vehicles.
It will mark Funding Circle’s second securitisation of its loans, having become the first UK P2P platform to securitise its assets in 2016 in a transaction also arranged by Deutsche Bank.
Funding Circle declined to comment.
P2PGI said in its March update that the transaction was due to close in early May and would enhance its returns.
The fund reported a slowdown in growth of its net asset value (NAV) for March, returning 0.12 per cent from 0.43 per cent in February.
This was blamed on poor performance from its UK consumer loans.
“The portfolio continues to be transitioned to more specialist asset classes which exhibit lower volatility and better coverage ratio of income to bad debts,” a P2PGI update said.
“Overall the percentage of European Union secured assets and UK small- and medium-sized enterprises increased from 26 per cent to 37 per cent over the past six months with a reduction in exposure to existing US and EU consumer platforms.”
Read more: Zopa plans more securitisations