[isaacdstern]

https://www.ondeck.com/company/in-th...usiness-loans/

[Chambo]

They have produced a prospectus and applied for securitization. The info in that prospectus is kind of interesting

Modification of Credit Policies
The Seller’s risk management team monitors and analyzes loan portfolio performance using various
metrics, portfolio stratifications, and indicators to manage credit risk and engages in various testing and random
auditing. Historically, the Seller has modified the Credit Policies from time to time in order to comply with state
and federal legal requirements and otherwise to enhance its small business lending business. It is the stated purpose
of the Credit Policies that they be responsive to changing market conditions and reflect an appropriate balance
between the objectives of customer service, profitability, and risk management. From time to time, the Seller
implements new processes and tools that it believes will increase the accuracy and effectiveness of its underwriting,
servicing, and collection processes. Any update to the proprietary risk scoring model is tested using statistical
model validation techniques before being adopted. Any change to OnDeck Score™ cut-offs require the unanimous
consent of all members of the Seller’s risk management team, and for material changes, the Seller’s Credit
Committee. There can be no assurance that the Credit Policies, risk scoring model, related cut-offs and other
policies and procedures described herein will not change materially over time after the Closing Date. Moreover, the
Seller may modify the Credit Policies without Noteholder consent, provided such modification would not reasonably
be expected to result in an Adverse Effect. However, the Seller has agreed under the Loan Purchase Agreement to
continue to use version 4 of its scoring model to determine whether a loan is eligible for purchase by the Issuer
thereunder unless and until the Rating Agency Condition with respect to each series of notes, including the Series
2014-1 Notes, is satisfied with respect to any later version of its scoring model. See “Description of the Loan
Purchase Agreement—Certain Covenants.”

[Sean Cash]

post link to the prospectus.

[MCNetwork]

Impressive. That should really bring down their cost of funds to lend.

[funding pro]

This is great for the industry. Despite what everyone speculates about ODC's financial performance, being able to successfully securitize their book is another step in the right direction for them. THey may or may not be profitable, but this will help take a huge expense off of their P&L for the next billion they fund.

[Chambo]

Really? You want MBA's and (gulp) SEC Regulators going over the books??? If they go through with this, they will have to post their financials every three months. INCLUDING defaults. They cannot BS and lie about them either.

A BD Rep trying to solicit ISO's is one thing, but The SEC? People go to jail for that

[staten]

Really? You want MBA's and (gulp) SEC Regulators going over the books??? If they go through with this, they will have to post their financials every three months. INCLUDING defaults. They cannot BS and lie about them either.

A BD Rep trying to solicit ISO's is one thing, but The SEC? People go to jail for that

They had to disclose defaults to get a rating. Already done. Very easy to manipulate bad debt methodology. Also somewhat easy to "hide" defaults as long as the book is growing.

[Chambo]

the notes are BB rated....

[staten]

the notes are BB rated....

Tranche A was BBB or investment grade. Oversubscribed does anyone know the price?

[MCAVeteran]

Are they disclosing that these asset classes are subject to stacking and therefore creating addtl risk for the investor marketplace?

[Chambo]

What do YOU think Ed?

[isaacdstern]

word on the street is OD funded over 2000 deals in april

[isaacdstern]

And they just funded a deal for us from submission to funding in under 3 hours....we literally submitted this thing today at 345

[Capital Stack]

very good point staten

[Capital Stack]

Impressive!

and they just funded a deal for us from submission to funding in under 3 hours....we literally submitted this thing today at 345

[Capital Stack]

ODC will cash out lovely very soon, being the last ones laughing on their inability to turn a profit.

[staten]

ODC will cash out lovely very soon, being the last ones laughing on their inability to turn a profit.

Possibly. Ipo window closed for no earnings companies for now though. Institutional buyers of paper don't care about the company's profitability. They are secured with at least 200 million of equity beneath them. Regarding stacking think buyers of RMBS, they can't prevent the homeowners from getting HELOCs. I know they are secured so not a perfect example. As brokers you should just take advantage of deal frenzy and OD's voracious appetite.

[Franklin]

word on the street is OD funded over 2000 deals in april

2000 deals in April alone? That seems a bit much, was that a typo?

[Chambo]

not the first time I have seen that many posted

[Franklin]

Well if they did 65 million in funding last year as the article suggests, at an an average of $35,000 per deal, you're looking at just over 1800+ deals. IF those numbers are accurate, (and maybe they're not) it would seem a stretch that they beat all of a previous year in one month.

[Sean Cash]

Well if they did 65 million in funding last year as the article suggests, at an an average of $35,000 per deal, you're looking at just over 1800+ deals. IF those numbers are accurate, (and maybe they're not) it would seem a stretch that they beat all of a previous year in one month.

They didn't have $65 million in funding last year, they had $65 million in revenue. Totally different measure.

[isaacdstern]

This article just hit

http://mobile.businessweek.com/articles/2014-05-01/selling-subprime-loans-to-wall-street-investors-this-time-for-small-businesses

[cashguy]

Great article

[MCAVeteran]

It states 47 percent of loans were placed by brokers. Where did the other 53 perc come from? Also, the article basically states brokers cause the rates to be very costly. So, what I'm interpreting here is that on deck like lending club and funding circle have entered the selling of bonds market to accredited investors and the rates will come down which also could mean more of a direct to customer model. It didn't really state that broker business was a positive thing for customers in this article, or, the buy rates allowing high upsells could be eliminated eventually-

[Sean Cash]

It states 47 percent of loans were placed by brokers. Where did the other 53 perc come from? Also, the article basically states brokers cause the rates to be very costly. So, what I'm interpreting here is that on deck like lending club and funding circle have entered the selling of bonds market to accredited investors and the rates will come down which also could mean more of a direct to customer model. It didn't really state that broker business was a positive thing for customers in this article, or, the buy rates allowing high upsells could be eliminated eventually-

43% came from their direct marketing. View the entire DBRS report here: http://dailyfunder.com/dbrsondeck.pdf