FUNDING Circle is getting set for the fourth securitisation of a package of its small- and medium-sized enterprise (SME) loans.
A statement from Deutsche Bank said it has been mandated as arranger and lead manager for SBOLT 2019-2, a transaction backed by “a portfolio of UK SME assets originated via the Funding Circle marketplace may follow, subject to market conditions.”
The transaction is believed to be in its early stages with no indication yet of the pricing or how many loans are involved.
Funding Circle declined to comment.
It comes after a £187m portfolio of loans originated by the peer-to-peer lender was securitised in April, sponsored by Pollen Street Capital.
The senior tranche was awarded an Aa3, A (high) and AA- rating by ratings agencies Moody’s, DBRS and Kroll respectively.
On closing, the spread over one-month Libor on the senior tranche was 105 basis points.
This was higher than Funding Circle’s second securitisation which was priced at 75 basis points, but lower than the 220 basis points on its first debt-packaging transaction in 2016.
Commenting in April, Sachin Patel (pictured), chief capital officer at Funding Circle, the securitisation validated the “attractive, risk-adjusted returns that are being generated for investors in SME loans.”
Funding Circle and Zopa are the only two UK P2P lenders to have securitised loans to date. A recent report from credit agency DBRS predicted that securitisation will play a key role in the growth of P2P lending in the UK and Europe.