Author Topic: LC Loan Issuance by Quarter  (Read 3252 times)

Rob L

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LC Loan Issuance by Quarter
« on: April 09, 2017, 11:48:35 AM »
On the theory that the poor performance of high risk loans should result in lower issuance I decided to look at the data. I found it surprising that C grade loans have always been the top issuance and represent 35% of the most recent quarter's total. Maybe this was common knowledge to everyone but me. B grade loans are not far behind. Meanwhile, D grade loans fell steadily over the entire period until the most recent two quarters when their share turned and began to rise. Go figure ... What are they putting into those securitizations anyway?







rawraw

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Re: LC Loan Issuance by Quarter
« Reply #1 on: April 09, 2017, 02:44:37 PM »
Yes, I knew about the C mix just because how people used to complain there wasn't enough of DEF notes.  The portfolios of many people on this forum differs widely from the "market" of LC, which is why our current pain is probably more acute than the market as a whole.

lascott

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Re: LC Loan Issuance by Quarter
« Reply #2 on: April 09, 2017, 02:59:57 PM »
Retail only -- 3 and 12 month view from BlueVestment





update - added retail only comment to be clearer
« Last Edit: April 09, 2017, 03:40:34 PM by lascott »
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Fred93

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Re: LC Loan Issuance by Quarter
« Reply #3 on: April 09, 2017, 03:05:37 PM »
I believe BV is plotting retail inventory level (ie # loans listed for sale on LC web site), not volume of loan transactions.

Rob L

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Re: LC Loan Issuance by Quarter
« Reply #4 on: April 10, 2017, 12:32:13 AM »
Thought it would be interesting to add a graph of originations by funding source.
This to speculate on the funding source(s) for each grade.
Only 2015 and 2016 quarters are easily available.

The surprising (to me) increase in grade D loan originations in Q316 and Q416 (charts above) roughly corresponds to an increase in originations by Managed Accounts over the same period. Working theory; Managed Accounts were a large contributor to the increase. Time will tell if they were right.

Originations of A grade loans dropped 50% in the last 3 quarters of 2016. Working theory; LC has found it increasingly difficult to compete for these loans versus Discover, Marcus, et. al. This I would expect.





nonattender

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Re: LC Loan Issuance by Quarter
« Reply #5 on: April 10, 2017, 12:57:53 AM »
Originations of A grade loans dropped 50% in the last 3 quarters of 2016. Working theory; LC has found it increasingly difficult to compete for these loans versus Discover, Marcus, et. al. This I would expect.

I'd just guess something silly and simple like they made the model more conservative/stingy on handing out A's, like they said they would.
A little nonsense now and then is relished by the wisest men.

fliphusker

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Re: LC Loan Issuance by Quarter
« Reply #6 on: April 10, 2017, 01:27:18 AM »
Originations of A grade loans dropped 50% in the last 3 quarters of 2016. Working theory; LC has found it increasingly difficult to compete for these loans versus Discover, Marcus, et. al. This I would expect.

I'd just guess something silly and simple like they made the model more conservative/stingy on handing out A's, like they said they would.
Could it be that there just is not much interest in A notes on the retail market? So LC just pushes them onto the other markets where they are more wanted?

Rob L

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Re: LC Loan Issuance by Quarter
« Reply #7 on: April 10, 2017, 08:59:28 AM »
Originations of A grade loans dropped 50% in the last 3 quarters of 2016. Working theory; LC has found it increasingly difficult to compete for these loans versus Discover, Marcus, et. al. This I would expect.

I'd just guess something silly and simple like they made the model more conservative/stingy on handing out A's, like they said they would.
Could it be that there just is not much interest in A notes on the retail market? So LC just pushes them onto the other markets where they are more wanted?

The origination numbers in the charts are from all markets, not just retail.