Lending platform CommonBond is executing the securitization of $100 million of student loans, making it the latest peer-to-peer lender to find a much bigger marketplace for its assets.
Because banks are bailing on the student-loan market left and right, it couldn?t come at a better time.
Like other peer-to-peer lenders (or “marketplaces”) SoFi and LendingClub, CommonBond is taking lending opportunities that used to go straight to banks directly to consumers instead.
For the institutional investors about to pile into the $100 million offering, CommonBond can offer them more peace of mind than other student loan securitization sales. The lender has gone out of its way to tap into the most reliable segment of student borrowers ? graduate students ? instead of undergrads.
?These are folks who are older,? says cofounder and CEO David Klein, adding that those who ?get graduate degrees are more likely to pay off debt than the average bear.?
It is expected ratings agencies Moody?s will rate the debt Baa2 and that DBRS will rate it A, he said.
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