LendingClub’s Structured Loan Certificates Program Reaches $1 Billion Mark

LendingClub has crossed the $1 billion mark in personal loans sold through its Structured Loan Certificates Program (SLCLC Program) since the launch of that program in April.

The company expects to double this volume to $2 billion over the next six months as it continues to scale, LendingClub said in a Thursday (Nov. 9) press release.

The SLCLC Program, a two-tranche private securitization, allows LendingClub to retain the senior note while selling the residual certificate on a pool of loans to marketplace investors at a predetermined price, according to the release.

This structure benefits both investors and LendingClub, with investors gaining attractive leveraged returns with low friction and low-cost financing on a liquid security, while LendingClub earns an appealing yield with minimal credit risk, the release said.

The SLCLC Program has experienced rapid expansion since its launch, attracting new investors to the LendingClub platform, per the release.

“Listening and responding quickly to investor needs is essential to our marketplace, and the product’s rapid adoption with investors who are new to the LendingClub platform is confirmation that we’re on target and leading the industry forward,” Clarke Roberts, general manager of marketplace at LendingClub, said in the release.

Investment funds advised by Davidson Kempner Capital Management acted as the anchor investor for the initial series transactions, followed by subsequent investors such as Atalaya Capital Management, Nelnet and Värde Partners, according to the press release. J.P. Morgan Securities LLC facilitated the settlement of the securities.

Justin Burns, managing director at Atalaya Capital Management, said in the release: “As an entrepreneurial firm, we’re excited to partner with LendingClub on its latest innovative structure. The Structured Loan Certificates program provides us both efficient leverage and scalable access to personal loans from a provider of choice in the asset class.”

The SLCLC Program joins a number of other unique product structures LendingClub has introduced during its 15-year history to expand investor access to consumer credit, improve liquidity and broaden distribution, per the release.

The company is also preparing to roll out other new products by the end of the year, LendingClub CEO Scott Sanborn said on Oct. 25 during the company’s quarterly earnings call. These include adding loan servicing to the company’s banking mobile app, launching a line of credit products that lets approved members sweep credit card balances into fully amortizing payment plans, and introducing a debt management and monitoring experience.