LendingClub Funds $1 Billion in CLUB Certificates

LendingClub announced today that it has funded $1 billion in CLUB Certificates, in just under a year since the company introduced the offering. According to its website, CLUB Certificates are “pass-through securities with CUSIP numbers backed by LendingClub prime or near prime personal loans.”

What does this mean? LendingClub was unreachable at the time, but LendAcademy researched it in December 2017 when the product was announced and indicated that the initiative was prompted by a potential investor who did not want to invest in whole loans, which can have a duration of several years. Instead, the investor wanted a security that acted like a whole loan, but had liquidity.

The result, according to LendIt, was the LendingClub CLUB Certificate, a security with an identification code that is cleared by the Depository Trust & Clearing Corporation (DTCC) and could be traded in over-the-counter markets. Furthermore, LendIt wrote in the December 2017 story that the deal that precipitated the LendingClub CLUB Certificate was “a $25 million deal that was sold to one investor and in keeping with Dodd-Frank rules LendingClub retained 5% of the deal total on their balance sheet.”

“We continue to innovate for investors and diversify our investor base,” said Valerie Kay, Chief Capital Officer of LendingClub. “By continually innovating on products, LendingClub expects to further deepen and broaden investor access in 2019 and beyond through a variety of new products and structures.”

CLUB Certificates can be seen on Bloomberg and Intex with the “CLUBC” ticker.

In the third quarter of 2018, LendingClub posted record originations of $2.9 billion, up 18% year-over-year.  Founded in 2006 and headquartered in San Francisco, LendingClub offers fixed rate business loans from $5,000 to $300,000 and personal loans of up to $40,000.