Lending Club is Discontinuing F and G Grade Notes

Per Lending Club’s website, the company is discontinuing issuance of F & G grade notes.

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.

More information about this change can be found here.

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.

Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.