A securitisation of loans originated through financial innovator Zopa has received the highest debut rating globally for any issuance backed by peer-to-peer loans, with a AA- rating from Fitch and Aa3 rating from Moody’s on the most senior notes.
The securitisation was led by P2PGI, the first UK listed investment trust dedicated to investing in loans originated via marketplace platforms, and was arranged by Deutsche Bank.
The successful transaction was met with strong interest from a wide range of investors and is both a reflection of Zopa’s impressive track record in credit risk and the market’s confidence in Zopa’s loans, underwriting and credit risk management.
Zopa pioneered the peer-to-peer lending model in 2005 and has consistently pursued a policy of prudent lending. It has now facilitated over £1.7 billion in unsecured personal loans to UK consumers, making it the largest European peer-to-peer platform by total lent.
Each Zopa loan applicant is assessed using a multi-bureau approach, advanced machine learning and rigorous underwriting procedures. Zopa is committed to offering affordable loans, with the lowest risk borrowers accounting for the greatest portion of its portfolio.
Jaidev Janardana, CEO of Zopa, says, “This is an exciting milestone in Zopa’s journey. The securitisation process has involved detailed scrutiny of our underwriting and servicing practices from both ratings agencies and investors. The market reception validates the robustness of our platform and our prudent lending policies. It brings Zopa personal loans further into the public spotlight and expands the universe of people who can participate in peer-to-peer lending. This supports our mission of providing a fairer financial future to even more customers.”
Simon Champ, CEO of MW Eaglewood Europe, the manager of P2P GI, said: “This transaction marks a positive step in enabling us to deliver on our objective to both diversify the sources and reduce the cost of our funding. The funds raised by the issue will now be progressively deployed in line with the investment strategy and our intention remains to steadily increase our leverage ratio to 100%.”