PeerIQ Updates on Marketplace Lending Securitization: $2.9 Billion in Q1
Summary
PeerIQ is reporting on the Q1 2017 alternative lending markets and, according to their numbers, marketplace lending securitization is a “bright spot” in the ABS market with total issuance topping $2.9 billion this quarter. PeerIQ states that Q1 saw strong demand in the sector; “In 1Q 2017, we saw spreads tighten in riskier tranches, indicating strong investor appetite for MPL ABS paper in the market. Stacking is the occurrence of borrowers taking out multiple loans from various online lenders in a short period of time thus increasing risk. PeerIQ explains that originators are getting better at mitigating stacking thus improving investor confidence. PeerIQ hints at the prospect of increased ‘loan modifications’ and predict that credit models trained on post-2008 data will tend to under-estimate losses.