DBRS Assigns Provisional Ratings to SoFi Consumer Loan Program 2017-5

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes issued by SoFi Consumer Loan Program 2017-5 (SCLP 2017-5):

-- $287,200,000 Class A-1 Notes at AA (sf)
-- $173,800,000 Class A-2 Notes at AA (sf)
-- $66,120,000 Class B Notes at A (sf)

The provisional ratings are based on DBRS’s review of the following analytical considerations:

-- The transaction’s form and sufficiency of available credit enhancement.
-- The quality and credit characteristics of the consumer loan borrowers.
-- Structural features of the transaction that require the notes to enter into full turbo principal amortization if certain performance triggers are breached or if credit enhancement deteriorates.
-- The experience, underwriting and origination capabilities of SoFi Lending Corp.
-- The ability of the Servicer to perform servicing and collections on the collateral pool and other required activities.
-- The ability of Systems and Services Technologies to perform duties as a backup servicer.
-- The legal structure and expected legal opinions that will address the true sale of the student loans, the non-consolidation of the trust, that the trust has a valid first-priority security interest in the assets and consistency with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.

The notes will be collateralized by a pool of fixed-rate (comprising 97.8% of the pool) and variable-rate (comprising 2.2% of the pool) unsecured consumer loans that fully amortize over their set maturity terms. Prior to their issuance, these loans were funded and owned by the sponsor, its financing subsidiaries or investors who purchased the loans from the sponsor.

The structure includes a fully funded reserve account (0.50%), overcollateralization (12.15%) and subordination in the form of the Class B Notes (11.02%), which is very similar to the SCLP 2017-4 transaction structure. However, the SCLP 2017-5 structure differs from that of SCLP 2017-4 in that this transaction splits its Class A Notes into two. The Class A-1 Notes, Class A-2 Notes and Class B Notes will bear interest based on a fixed rate that will be determined at pricing.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is Rating U.S. Structured Finance Transactions, which can be found on dbrs.com under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.

The full report providing additional analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.