NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Marlette Funding Trust 2017-1 (MFT 2017-1). This is a $257.44 million consumer loan ABS transaction that is expected to close on March 23, 2017. This transaction represents the third securitization collateralized by unsecured consumer loans originated by Cross River Bank, under the Marlette Best Egg Platform and sold to Marlette Funding, LLC (“Marlette”) or its affiliate.
Founded in 2013 in Wilmington DE, Marlette operates an online marketplace lending platform, operating under the Best Egg brand (“the Marlette Best Egg Platform” or “the Platform”). Approximately $250 - $325 million of loans are originated through the Platform per quarter. Since March 2015, over $3 billion of loans have been originated though the Platform, and as of February 2017, Marlette has over $100 million of loans on its balance sheet.
Marlette purchases and retains for its own balance sheet a portion of the loans originated through the Marlette BestEgg Platform. The Platform does not offer a Peer-to-Peer funding, but instead partners exclusively with institutional investors for whole loan sales. All whole loan purchasers receive a random allocation of originations. Loan retention from Cross River Bank, loan purchases from Marlette and whole loan purchasers from institutional investors creates an alignment of interest among stakeholders. On the closing date, the depositor will acquire loans from seven Loan Sellers who will contribute loans as collateral for MFT 2017-1.
The transaction has initial credit enhancement levels of 27.45% for the Class A Notes, 17.95% for the Class B Notes, and 9.10% for the Class C Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A and Class B Notes) and a reserve account funded at closing.
KBRA applied its General Rating Methodology for Asset-Backed Securities as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and the platform’s historical gross loss data. KBRA also conducted an operational assessment of the Marlette platform, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.
Preliminary Ratings Assigned: Marlette Funding Trust 2017-1
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