CommonBond Securitizes Refinanced Student Loans Worth $168 Million

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Online lender for student loans, CommonBond closed a $168 million securitization, backed by $178 million in collateral with an ‘A1’ rating from Moody’s and ‘AA’ from DBRS.

This is the company’s second deal this year, after a $150 million transaction, earlier in April.

Founded by Wharton graduates David Klein, Michael Taormina, and Jessup Shean in 2012, CommonBond set out to address the need for affordable graduate student loan options. So far, the company has crossed $500 million in funded loans and provides MBA loans, personal loans and refinances student loans . The New York-based lender uses data and technology to underwrite its loans, holding half on its balance sheet and selling the other half though a marketplace. In July this year, it also raised $30 million in equity, $300 million in debt and acquired a personal finance startup, Gradible.

“CommonBond has built a sterling reputation in the capital markets due to our meticulous, data-driven underwriting,” said Morgan Edwards, Chief Financial Officer of CommonBond. “We continue to be excited to see new investors participate with each transaction we bring to the market and expect to see the diversity of investors increase with subsequent deals,” he said in a statement.

CommonBond competes with the likes of SoFi, which recently securitized bonds worth $427 million its third deal this year. And like SoFi, which started off with student loans before moving to personal loans and mortgages, CommonBond also wants a larger share of the pie. “Our long term vision is to provide our customers with their evolving needs and we are well positioned to provide other products and services over time,” CEO David Klein told deBanked earlier.

Barclays and Goldman Sachs served as joint-lead managers and bookrunners on the transaction.

Last modified: April 20, 2019

Category: Marketplace Lending

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