KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2020-1

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Marlette Funding Trust 2020-1 (MFT 2020-1). This is a $257.052 million consumer loan ABS transaction.

This transaction is the 13th securitization sponsored by Marlette. The first multi-seller securitization issued from Marlette Funding Trust (MFT) was in August 2016. Under the multi-seller securitization program, Marlette is the Sponsor and the collateral is contributed from Marlette and whole loan buyers of loans originated through the Platform. All prior MFT securitizations were rated by KBRA.

Founded in 2013 in Wilmington, DE, Marlette operates an online marketplace lending platform, operating under the Best Egg brand (www.mybestegg.com) (the Marlette Best Egg Platform or the Platform).

The loans in the collateral pool are originated by Cross River Bank. Borrowers in MFT 2020-1 have a weighted average interest rate and weighted average FICO score of 13.47% and 720, respectively. The collateral pool has a weighted average original term of 46 months, which reflects a weighted average seasoning of 3 months.

The transaction has initial credit enhancement levels of 45.25% for the Class A Notes, 27.25% for the Class B Notes, 21.05% for the Class C Notes and 11.10% for the Class D Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (in the case of the Class A, Class B and Class C Notes) and a reserve account funded at closing.

KBRA applied its Global Consumer Loan ABS Rating Methodology published on November 28, 2017 and Global Structured Finance Counterparty Methodology published on August 8, 2018 as part of its analysis of the transactions underlying collateral pool, the proposed capital structure and the Marlette Platforms historical gross loss data. KBRA also conducted an operational assessment of the Marlette 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: Marlette Funding Trust 2020-1

Class

Preliminary Rating

Maximum Initial Principal Amount

A [1][2]

AAA (sf)

$158,806,000

B [1][2]

AA (sf)

$51,784,000

C

A (sf)

$17,837,000

D

BBB- (sf)

$28,625,000

AB [2][3]

AA (sf)

$210,590,000

[1] This Class of Notes is a Class of Exchange Notes. Either Exchange Notes or Exchangeable Notes or a combination thereof may be issued and may be exchanged for the corresponding Exchangeable Notes or Exchange Notes, respectively, and vice versa. Each class of Exchangeable Notes will be entitled to a portion of the interest and principal payments of the related Exchange Notes and any shortfalls will be borne proportionately by the related class of Exchangeable Notes. [2] The amount listed for the Exchange Notes and Exchangeable Notes represents the maximum initial principal amount. [3] This Class of Notes is a Class of Exchangeable Notes. Either Exchange Notes or Exchangeable Notes or a combination thereof may be issued and may be exchanged for the corresponding Exchangeable Notes or Exchange Notes, respectively, and vice versa.

To access ratings, reports and disclosures, click here.

Related Publications: (available at www.kbra.com)

CONNECT WITH KBRA Twitter LinkedIn YouTube

About KBRA and KBRA Europe

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. KBRA is also 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.

Analytical:

Eric Neglia, Managing Director

(646) 731-2456

[email protected]

Brendan Carter, Associate Director

(646) 731-3315

[email protected]

Michael Pettigrew, Analyst

(646) 731-1208

[email protected]

Business Development:

Arielle Smelkinson, Director

(646) 731-2369

[email protected]