Transaction Lowers Loan Rates, Provides Path to Expand Consumer Lending
San Francisco, CA – Social Finance, Inc. (SoFi), a leader in marketplace lending, today announced it has closed a $251 million securitization of refinanced student loans for graduate borrowers. S&P and DBRS rated the senior notes ‘A’, the first such S&P rating for a marketplace lender securitization.
“This securitization allows us to significantly lower the cost of borrowing for our members,” said SoFi’s Chief Financial Officer, Nino Fanlo. “Because the rating was based on the caliber of SoFi’s customers and approach to consumer underwriting, it allows us to expand our school footprint and build a roadmap for other types of lending, such as personal loans and mortgages.”
In December 2013, SoFi issued the first securitization in the category with $151 million in senior notes backed by $168 million in collateral. The $251 million July 2014 transaction is backed by $278 million in collateral. Both rounds included retail and institutional investors, with over 30 top tier institutional investors participating in July. Morgan Stanley served as the structuring agent and joined Goldman Sachs in distributing the senior notes. SoFi Securities assisted in the transaction acting as a placement agent with respect to the senior notes and equity interests.
“We’re delighted to invest in high quality customers like SoFi borrowers,” said Anup Agarwal, Head of Mortgages and Structured Products, Western Asset Management Company (WAMCO.) “We and our investors look forward to doing more business with SoFi as their product offerings expand.”
The securitization comes on the back of record growth at SoFi. In June, the company funded over $100 million in student loan refinancing- a monthly record. SoFi has also begun to offer personal loans and mortgages. SoFi has originated over $700 million in loans to date, and counts over 8,000 borrowers in its community.
For the first time in history, accomplished graduates are unable to attain many of life’s milestones- like starting a company, purchasing a home, or buying a car- because of the massive student debt burden. SoFi offers student loan refinancing, mortgages, and personal loans to highly qualified graduates. To date we’ve issued over $730M in loans to more than 8,000 members. Our community-based model offers borrowers unique benefits like career coaching, entrepreneurship support, and unemployment protection. We offer individual and institutional investors opportunities to invest in these bright minds and earn compelling rates of return. For more information, visit SoFi.com.