$399M in Collateral Is the Company’s Largest Deal to Date
NEW YORK (December 20, 2018) – CommonBond, a leader in higher education finance, today announced a securitization of $399.2 million in total loans. 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 eighth and brings the company’s total securitized loan amount to approximately $2.0 billion. Goldman Sachs served as structuring agent, co-lead manager, book-runner, and co-sponsor for this securitization. Barclays, Citi, and Guggenheim Securities also served as co-lead managers and book-runners on the transaction.
The structure included a unique feature called “prefunding,” which enables CommonBond to add loans to the securitization after its close. CommonBond is the first private lender to prefund a student loan refinance securitization in the modern financial era. CommonBond prefunded approximately $80 million worth of loans as part of the deal.
“Pre-funding allows us to provide investors with more size and certainty, while at the same time add flexibility to our own funding model, in a way that is differentiated from others in the market,” said David Klein, CommonBond CEO and co-founder. “This is a key milestone in our securitization program, and powers even more liquidity in the name, stability in the program, and consistency in performance.”
This securitization marks continued growth for CommonBond, which will originate more than $1 billion in 2018. The company has raised $3 billion in debt funding and more than $130 million in equity to date. Its customer acquisition costs remain a fraction of industry peers, its credit quality remains best in class, and the company has been profitable for three of the last six quarters. CommonBond is one of TIME magazine’s 2018 50 Genius Companies, and Fast Company’s World’s 50 Most Innovative Companies 2018. To fuel its continued expansion, in December 2018 the company acquired NextGenVest, an AI-powered financial platform for Generation Z.
CommonBond is a financial technology company on a mission to give students and graduates more affordable, transparent, and simple ways to pay for higher education. The company offers loans to current students, refinance loans to college graduates, and a suite of student loan repayment benefits to employees through its CommonBond for Business™ program. By designing a better student loan experience, that combines advanced technology with competitive rates and award-winning customer service, CommonBond has funded over $2.5 billion in loans for its members. CommonBond is also the first and only finance company with a "one-for-one" social mission: for every loan it funds, CommonBond also funds the education of a child in need, through its partnership with Pencils of Promise. For more information, visit www.commonbond.co.