Author Topic: LendingClub Files S-1 with SEC  (Read 16189 times)

brycemason

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LendingClub Files S-1 with SEC
« on: August 27, 2014, 02:21:14 PM »
Hot off the press, LendingClub filed their S-1 today. You can read the document at the SEC EDGAR tool. Update this thread with any interesting tidbits!

http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001409970&owner=include&count=40

Half Right

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Re: LendingClub Files S-1 with SEC
« Reply #1 on: August 27, 2014, 02:35:17 PM »

LendingClub files for $500M IPO

    Top P2P lending platform LendingClub has filed for a $500M IPO. No symbol has been proposed yet. The underwriters are Goldman, Morgan Stanley, Citi, Stifel, BMO, Allen & Co., William Blair, and Wells Fargo. (prospectus)
    LendingClub had 1H14 revenue of $87.3M (+135% Y/Y), and a net loss of $16.5M. Sales/marketing spend totaled $39.8M, and origination/servicing costs $15.7M.
    1H14 Loan originations totaled $1.8B (+125% Y/Y), with contribution margin coming in at 41.8% (+70 bps Y/Y). The company had $2.33B in loans on its balance sheet as of June 30.
    LendingClub was valued at $3.75B in a funding round that took place earlier this year. The FT has reported the company is aiming for a ~$5B IPO valuation.

Randawl

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Re: LendingClub Files S-1 with SEC
« Reply #2 on: August 27, 2014, 02:40:16 PM »
Outstanding principal balance of loans at the end of periods indicated that were issued to the fractional pool.

March 31, 2012:  73.56%
December 31, 2012:  49.27%
December 31, 2013:  30.36%
June 30, 2014:  26.35%


Between December 31, 2013, and June 30, 2014, percentage of new issues to respective parties:

Fractional retail:  17.89%
Certificates:  28.75%
Whole loans:  53.36%
LC financed:  0.05%

Derived from data on page 52.



I had read about the Springstone acquisition, but had not heard about all of these details:

Springstone Acquisition

In April 2014, we acquired Springstone, which offers education and patient financing options. Springstone utilizes two issuing banks and a network of providers. Springstone facilitates two loan products:

  •   An installment loan with amounts ranging from $2,000 to $40,000, terms from 24 to 84 months, fixed rates from 3.99% to 17.99%, fixed monthly payments and no prepayment penalties. 

  •   A deferred interest loan with amounts ranging from $499 to $25,000 that provides for no interest if the balance is paid in full during the promotional period, which can be six, 12, 18 or 24 months. If the loan is not paid in full during the promotional period, interest is imposed from the issuance date at variable rate based upon the prime rate. There is no prepayment penalty and borrowers have the flexibility to pay as much or as little, subject to applicable minimums, of the outstanding balance per month during the promotional period as they chose. 

Currently, each of Springstone’s issuing banks originates, holds and services each issued loan. For its role in loan facilitation, Springstone earns transaction fees paid by the issuing bank and service provider at the time of origination, which averaged 4.9% of the initial loan balance in 2013. We plan to incorporate these education and patient financing products into our platform over time.


Springstone's balance sheets and such are also included.  I haven't pored over that yet.
« Last Edit: August 27, 2014, 02:54:14 PM by Randawl »

LoanWolf

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Re: LendingClub Files S-1 with SEC
« Reply #3 on: August 27, 2014, 04:26:09 PM »
Randawl, nice spotting of the current state of loan distributions, dangling between column 3 and column 4 of page 52.

I'm confused though - are certificates, which make up 44% of current principal outstanding, just another way of packaging loans (whole or fractional) to institutional investors? What are certificates?
« Last Edit: August 27, 2014, 04:27:54 PM by LoanWolf »

Half Right

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Re: LendingClub Files S-1 with SEC
« Reply #4 on: August 27, 2014, 04:34:50 PM »
I am guessing that certificates are issued to the LC Advisor Funds and therefore may also be considered Institutional for your purposes

LoanWolf

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Re: LendingClub Files S-1 with SEC
« Reply #5 on: August 27, 2014, 05:02:51 PM »
Perhaps it is to that fund and others, because it's a large share of the volume.

So the retail investor - whether through automated, manual, or API access, is currently getting a slowly shrinking pct of a rapidly growing pie.  Still growing in absolute terms, but the IPO will bring in more retail investors too, so more competition for whatever slice of the loan volume one is seeking.

Fred

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Re: LendingClub Files S-1 with SEC
« Reply #6 on: August 27, 2014, 05:53:39 PM »
Between December 31, 2013, and June 30, 2014, percentage of new issues to respective parties:

Fractional retail:  17.89%
Certificates:  28.75%
Whole loans:  53.36%
LC financed:  0.05%

Derived from data on page 52.

How did you derive this?

LoanWolf

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Re: LendingClub Files S-1 with SEC
« Reply #7 on: August 27, 2014, 06:16:16 PM »
I believe that Randawl derived this by subtracting the cumulative loan volume from last December from the cumulative numbers for June, for each category, and then dividing those by the total volume for that time period.  So it represents the breakdown for the new loan volume for the first half of this year.

Fred

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Re: LendingClub Files S-1 with SEC
« Reply #8 on: August 27, 2014, 06:35:13 PM »
I believe that Randawl derived this by subtracting the cumulative loan volume from last December from the cumulative numbers for June, for each category, and then dividing those by the total volume for that time period.  So it represents the breakdown for the new loan volume for the first half of this year.

Hmm ... those numbers are not technically "new issues" then.  The numbers represent the "changes in outstanding balance", which included new loans minus principal pay-down.

Page 46 says:
Quote
over $1 billion of loans facilitated during the second quarter of 2014

These are "new issues" in Q2-2014.

Anyway, it is a good insight though.

LoanWolf

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Re: LendingClub Files S-1 with SEC
« Reply #9 on: August 27, 2014, 06:59:09 PM »
You're right, I stand corrected.  Any definitive answer to what class of loans Certificates represent in this table, anyone?  They are the largest category at the end of June.

Notes         $ 880.8
Certificates  1,481.1
Whole loans     980.7
LC financed       0.5

Peter

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Re: LendingClub Files S-1 with SEC
« Reply #10 on: August 27, 2014, 07:15:46 PM »
You're right, I stand corrected.  Any definitive answer to what class of loans Certificates represent in this table, anyone?  They are the largest category at the end of June.

Notes         $ 880.8
Certificates  1,481.1
Whole loans     980.7
LC financed       0.5

The certificates are going to be the LC Advisors funds as well as all their HNW and institutional investors that invest through LC Trust I - their bankruptcy remote vehicle.
Publisher of the Lend Academy blog

See my returns here: http://www.lendacademy.com/returns

Randawl

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Re: LendingClub Files S-1 with SEC
« Reply #11 on: August 27, 2014, 09:47:23 PM »
I believe that Randawl derived this by subtracting the cumulative loan volume from last December from the cumulative numbers for June, for each category, and then dividing those by the total volume for that time period.  So it represents the breakdown for the new loan volume for the first half of this year.

Hmm ... those numbers are not technically "new issues" then.  The numbers represent the "changes in outstanding balance", which included new loans minus principal pay-down.

Page 46 says:
Quote
over $1 billion of loans facilitated during the second quarter of 2014

These are "new issues" in Q2-2014.

Anyway, it is a good insight though.


You're right. A better way to say it would be "change in outstanding balances among respective parties and time periods."  Which, as you correctly pointed out, includes new issuances minus interval principal pay-down. 

You're right, I stand corrected.  Any definitive answer to what class of loans Certificates represent in this table, anyone?  They are the largest category at the end of June.

Notes         $ 880.8
Certificates  1,481.1
Whole loans     980.7
LC financed       0.5

The certificates are going to be the LC Advisors funds as well as all their HNW and institutional investors that invest through LC Trust I - their bankruptcy remote vehicle.

What Peter said is correct. 

As an aside regarding certificate investors, wouldn't it be nice if you also had insurance in case your charge-offs got too high?

http://www.lendacademy.com/forum/index.php?topic=944.msg5686#msg5686
« Last Edit: August 27, 2014, 10:17:10 PM by Randawl »

lascott

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Re: LendingClub Files S-1 with SEC
« Reply #12 on: August 27, 2014, 10:31:51 PM »
You're right, I stand corrected.  Any definitive answer to what class of loans Certificates represent in this table, anyone?  They are the largest category at the end of June.

Notes         $ 880.8
Certificates  1,481.1
Whole loans     980.7
LC financed       0.5

The certificates are going to be the LC Advisors funds as well as all their HNW and institutional investors that invest through LC Trust I - their bankruptcy remote vehicle.
Interesting how much of the pie everyone gets.

Code: [Select]
Notes    880.8 26%
Certificates 1,481.10 44%
Whole loans    980.7 29%
LC financed      0.5 0%
  3343.1 100%
Tools I use: (main) BlueVestment: https://www.bluevestment.com/app/pricing + https://www.interestradar.com/ , (others) Lending Robot referral link: https://www.lendingrobot.com/ref/scott473/  & Peercube referral code: DFVA9Y

Fred

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Re: LendingClub Files S-1 with SEC
« Reply #13 on: August 28, 2014, 01:49:00 AM »
I might have missed this, but does anyone know how big of LC value is the $500M? 20%?

Fred

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Re: LendingClub Files S-1 with SEC
« Reply #14 on: August 28, 2014, 01:59:48 AM »