Alternative Finances

Lending Club Holds More Funding Talks

Loan talks with funds

The movement by Lending Club to obtain financing in order to help shore up capital appears to be gaining traction.

As reported by The Wall Street Journal, the beleaguered online lender has met with several large hedge funds, with discussions centering around a deal where those funds would buy billions of dollars’ worth of loans and would, in turn, get the right to own shares in the firm.

The information came from several unnamed sources, who said that the three funds included Och-Ziff Capital Management Group, Soros Fund Management and Third Point, and the amount under discussion could be as much as $5 billion should any deals materialize. That amount would indeed cover a big chunk of the company’s annual loan volume of roughly $8 billion, according to the latest full year reported. In addition, equity stake sizes under discussion would top 10 percent, sources told WSJ. In addition, there could even be a buyout offer coming down the line.

Analysts told WSJ that confidence in the firm from such marquee investment names would also instill confidence in other investors and perhaps help calm the public markets on the name. As has been widely reported, the company’s former CEO, Renaud Laplanche, resigned in the wake of a discovery of false documentation of loans, and the firm has yet to update holders on the financial health of the firm on the heels of the resignation last month.

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