Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Avant Loans Funding Trust 2019-A (AVNT 2019-A). This is a $283.456 million consumer loan ABS transaction that is expected to close on March 20, 2019.
This transaction represents Avant, LLCs (Avant, the Servicer or the Company) eighth rated securitization collateralized by a trust certificate backed by unsecured consumer loans originated through its online marketplace lending platform (Avant Platform). Avant Loans Funding Trust 2019-A (AVNT 2019-A or the Issuer) will issue three classes of notes totaling $283.456 million (collectively, the Notes) with an expected closing date of March 20, 2019. The proceeds from the sale of the Notes will be used to fund the reserve account and purchase loans from Avants warehouse facility and from whole loan buyers.
Founded in 2012, Avant is located in Chicago, Illinois and operates an online lending platform. Personal installment loans are offered primarily to non-prime consumers through the Avant Platform. Typical customers have an average annual income of $46,100 and FICO scores ranging from 580 to 720. Loans have an original term of between 24 “ 60 months, an original balance between $2,000 to $35,000 and a fixed APR between 5.95% – 35.95% depending on the borrowers risk profile and loan term. Beginning in 3Q16 the Avant Platform began charging an administration fee to borrowers. Administration fees currently range from 1.50% to 4.75% depending upon whether the borrower is issued a refinance product. In 2018, $1.1 billion was originated through the Avant Platform, up from $813 (35%) million in 2017. The primary purposes for the loans are for debt consolidation, emergency expense, life event, or car repair. As of December 31, 2018, approximately $5.5 billion in loans had been originated through the Avant Platform in the U.S.
Avant has a strategic partnership with WebBank, whereby WebBank, a Utah chartered industrial bank, originates loans through the Avant Platform. Avant utilizes technology and customized scoring models to assign credit grades. The Avant website is designed to provide customers with an easy interface and quick online loan decisions at competitive rates compared to traditional lending platforms.
KBRA applied its Global Consumer Loan ABS Rating Methodology for Asset-Backed Securities as part of its analysis of the transactions underlying collateral pool, the proposed capital structure and the Avant Platforms historical gross loss data. KBRA also conducted an operational assessment of the Avant Platform, as well as a review of the transactions legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.
Preliminary Ratings Assigned: Avant Loans Funding Trust 2019-A
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To access ratings, reports and disclosures, click here.
Related Publications: (available at www.kbra.com)
- Avant Loans Funding Trust 2019-A Pre-Sale Report
- Avant Loans Funding Trust 2019-A Peer Comparison
- Global Consumer Loan ABS Rating Methodology for Asset-Backed Securities
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
Eric Neglia, Managing
Melvin Zhou, CFA, Director
Rosemary Kelley, Senior Managing Director
Michael Polvere, Senior Analyst