CommonBond Sets Record with Latest AAA Securitization

CommonBond, a leading financial technology company, today announced the completion of its latest securitization totaling over $225 million in loans, setting a company record, for the most investor demand relative to bonds available, at 7x. The securitization received AAA ratings from Moody’s and DBRS, continuing the company’s track record of AAA-rated transactions.

‍The transaction was CommonBond’s tenth and brings the company’s total securitized loan amount to over $2 billion. Goldman Sachs served as structuring agent, co-lead manager, book-runner, and co-sponsor for this securitization. Barclays, Citi, BMO and Guggenheim Securities also served as co-lead managers and book-runners on the transaction.

“The market for high quality bonds has come roaring back,” said Sam Luk, Head of Capital Markets and Credit at CommonBond. “We were pleased to see the strong receptivity from investors – a testament to the platform we’ve built, the credit we underwrite, and the discipline with which we operate.”

The transaction priced better than the market’s expectations. The senior bonds priced 20-30 basis points tighter than initial market indications and landed on 170 basis points of credit spread. The high demand for the bonds also contributed to tighter spreads.

Securitization is one of multiple ways that CommonBond funds its loans. Other loan funding sources include whole loan sale commitments and warehouse line capacity. A highly diversified funding system ensures funding that is capable of withstanding market shocks over time.

This securitization follows a significant period of growth for CommonBond, which grew revenue significantly in 2019, and continues its topline growth in 2020. The company is profitable in 2020 year-to-date and is known for its low-cost customer acquisition as well as its high-quality customer experience.

In recognition of the company’s innovative DNA, Fast Company named CommonBond one of the World’s 50 Most Innovative Companies, and TIME Magazine named CommonBond one of its 50 Genius Companies in 2018. To date, the company has reached over 500,000 users in its consumer business and 1000s of corporate clients in its enterprise business.