KBRA assigns preliminary scores to SoFi 2021-1 Trust consumer loan program
NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four categories of notes issued by the SoFi Consumer Loan Program 2021-1 Trust (“SCLP 2021-1”), an asset-backed securities transaction consumption of $ 232.5 million. The preliminary ratings reflect initial credit enhancement levels of 25.67% for Class A Notes, 20.39% for Class B Notes, 13.95% for Class C Notes and 7.47% for Class D Notes. Credit Enhancement consists of over-collateralization, subordination of junior grade grades (except Class D grades), cash reserve account and excess margin.
SoFi Lending Corp. (“SoFi”, the “Sponsor” or the “Company”) is a California-based consumer finance company that was formed in 2012 as a wholly owned subsidiary of Social Finance, Inc. Social Finance, Inc. was established in May 2011 by alumni of the Stanford Graduate School of Business to refinance private student loans for graduate students. Since then, the Company has refined its student loan model for high quality borrowers and broadened its product offering to include personal loans, credit cards, mortgages, investments and banking services. The company’s prime credit and personal loan product was launched in 2015.
SoFi personal loans are fixed rate, unsecured consumer loans with original principal balances ranging from $ 5,000 to $ 100,000 and initial terms ranging from two to seven years. As of the August 22, 2021 deadline (“Deadline”), the weighted average annual income, FICO and monthly free cash flow (“FCF”) of borrowers in the SCLP 2021-1 guarantee pool are $ 164,808 . , 753 and $ 6,248, respectively. Based on the current capital balance, 78.8% of SCLP 2021-1 borrowers are owners. SoFi does not charge origination fees or prepayment penalties on any of its products.
KBRA applied its global consumer loan ABS rating methodology, as well as its global structured finance counterparty methodology and its overall ESG rating methodology as part of its analysis of the underlying collateral pool of the transaction, the proposed capital structure and data from SoFi’s historical static pool. KBRA has reviewed its operational review of SoFi as well as periodic update calls with the Company. Operational agreements and legal opinions will be reviewed prior to closing.
Further information on key credit considerations, sensitivity analyzes that examine the factors that may affect these credit ratings and how they might lead to an upgrade or downgrade, and ESG factors (where they are a major driver of change in credit rating or rating outlook) can be found in the full rating report mentioned above.
A description of all substantially significant sources that were used to prepare the credit rating and information about the method (s) (including significant models and sensitivity analyzes of relevant key rating assumptions, if any) used to determine the credit rating is available in the information disclosure form (s) located here.
Information on the meaning of each rating category can be located here.
Further information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures can be found at www.kbra.com.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a credit rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a credit rating agency with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is appointed as the designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or a shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.