Lending Club is Discontinuing F and G Grade NotesNovember 7, 2017 | By: Sean Murray
According to an announcement published by the company:
We are consistently assessing the value our product delivers to our investors, and have noticed an increase in prepayment and delinquency rate in F and G grade Notes. We feel it is in the best interest of our investors to remove F and G grade Notes while we test new capabilities and refinements to the underwriting and pricing criteria and determine how to best offer a better experience for both borrowers and investors in the F and G segment.
Peers invested in previously-issued F & G grade notes will still receive their payments until maturity.
Performance played a role in their decision.
Every quarter, we review product performance. During our third quarter 2017 forward-looking analysis, we saw increases in delinquency and prepayment rates in F and G grade loans. This update allows us the opportunity to re-assess how we can best deliver value to our investors through the platform.
Lending Club also published their Q3 earnings Tuesday afternoon. The company loaned $2.44B for the quarter and hit a record $154 million in revenue. The company still eeked out a $6.7 million loss, but that’s down from $19 million over the same period last year.
Dependence on retail investors or “peers” declined again. Only 10% of loan funding was sourced from the self-managed individuals category in Q3 or $249 million of the $2.44 billion funded.
Lending Club funded 9% of their own originations in the quarter or $217 million.Last modified: November 7, 2017
Sean Murray is the founder of deBanked, an 11-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper note investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.