Prosper tightens guidance on consumer loan ABS

2 min read
Natalie Harrison

Online lender Prosper Marketplace pulled in guidance on its US$501.05m consumer loan ABS on Wednesday, with all three of the deal’s tranches heard to be at least twice covered.

Guidance was announced at 85bp area over EDSF on the largest 0.85-year A-/A tranche (Fitch/Kroll) and 165bp-175bp over iSwaps for the US$77m 2.14-year BBB-/BBB tranche.

Guidance on the 2.89-year Class C, unrated by Fitch and rated B+ by Kroll, is 340bp area over iSwaps.

Those levels were tightened from whispers circulated at 85bp-95bp over EDSF, 180bp-190bp over iSwaps and mid-300bp over iSwaps, respectively.

Like Prosper, many issuers this week have been able to ratchet in pricing on ABS trades.

Marlette, for example, priced a US$291.823m unsecured consumer loan deal on Tuesday a whopping 25bp-85bp inside comparable tranches from its prior deal in June.

It offered a Double B tranche this time around that priced at 315bp over iSwaps - just a touch wider than where the BBB rated tranche came on its prior trade.

The Prosper deal, along with a student loan ABS from CommonBond, is expected to boost this week’s tally to 15 deals, which would tie for the busiest week of the year by number of issuers, according to IFR data.

Even if Prosper does not pull in pricing further from guidance, its latest trade will still come some 15bp-35bp inside where its prior deal came in August.

The latest trade is Prosper’s third from its own platform.

Its previous partnership with Citigroup - which bought Prosper loans and securitised them - came to an abrupt end amid extreme volatility.

Under its own shelf, Prosper has gained more control over the quality and timing of its deals.

The new bond deal, called PMIT 2017-3, is backed by over 31,250 of unsecured personal loans, which unlike car loans have no hard assets to repossess if the debt goes unpaid.

According to Kroll, the average borrower has a 708 FICO, US$87,119 of reported annual income and pays an interest rate of 16.21% on their Prosper loan.

Credit Suisse structured the deal and is a joint bookrunner with Jefferies. The deal is expected to price on Thursday or Friday.

Prosper Marketplace office