NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three
classes of notes issued by Avant Loans Funding Trust 2018-B (“AVNT
2018-B”). This is a $286.782 million consumer loan ABS transaction that
is expected to close on October 18, 2018.
This transaction represents Avant, LLC’s (“Avant”, the “Servicer” or the
“Company”) seventh rated securitization collateralized by a trust
certificate backed by unsecured consumer loans originated through its
online marketplace lending platform (“Avant Platform”). Avant Loans
Funding Trust 2018-B (“AVNT 2018-B” or the “Issuer”) will issue three
classes of notes totaling $286.782 million (collectively, the “Notes”).
The proceeds from the sale of the Notes will be used to fund the reserve
account and purchase loans from Avant’s warehouse facility and from
whole loan buyers.
Founded in 2012, Avant is located in Chicago, Illinois and operates an
online lending platform. Personal installment loans are offered to
non-prime consumers through the Avant Platform. Typical customers have
an average annual income of $61,000 and FICO scores ranging from 580 –
850. Loans have an original term of between 12 – 60 months, an original
balance between $2,000 to $35,000 and a fixed APR between 5.95% – 35.95%
depending on the borrower’s risk profile and loan term. Beginning in
3Q16 Avant began charging an administration fee to borrowers.
Administration fees currently range from 1.50% to 4.75% depending upon
whether the borrower is issued under a refinance product. Year to date
ending August 31, 2018, $665 million had been originated through the
Avant Platform, up from $474 million (40%) for the same period in 2017.
The primary purposes for the loans are for debt consolidation, emergency
expense, home improvement, or life events. As of August 31, 2018,
approximately $5.0 billion in loans have been originated through the
Avant Platform in the U.S.
Avant has a strategic partnership with WebBank, whereby WebBank, a Utah
chartered industrial bank, originates loans through the Avant Platform.
Avant utilizes technology and customized scoring models to assign credit
grades. The Avant website is designed to provide customers with an easy
interface and quick online loan decisions at competitive rates compared
to traditional lending platforms. Avant does not fund loans through a
peer-to-peer platform, but instead partners exclusively with
institutional investors for whole loan sales.
KBRA applied its Global Consumer Loan ABS Rating Methodology for
Asset-Backed Securities as part of its analysis of the transaction’s
underlying collateral pool, the proposed capital structure and the Avant
Platform’s historical gross loss data. KBRA also conducted an
operational assessment of the Avant 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: Avant Loans
Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required,
pursuant to SEC Rule 17g-7, to provide a description of a transaction’s
representations, warranties and enforcement mechanisms that are
available to investors when issuing credit ratings. KBRA’s disclosure
for this transaction can be found in the report available here.
Related Publications: (available at www.kbra.com)
Loans Funding Trust 2018-B Pre-Sale Report
Loans Funding Trust 2018-B Peer Comparison
Consumer Loan ABS Rating Methodology for Asset-Backed Securities
About KBRA and KBRA Europe
KBRA is a full service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
designated as a designated rating organization by the Ontario Securities
Commission for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus, is recognized by the National
Association of Insurance Commissioners as a Credit Rating Provider, and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.
Kroll Bond Rating
Eric Neglia, 646-731-2456
Senior Managing Director