Europe's First ABS of Peer-to-Peer Consumer Loans Nears Sale

P2P Global Investments Plc and Zopa Ltd. are working on Europe’s first securitization of unsecured consumer loans originated online.

The 138 million-pound ($179 million) transaction is backed by 27,137 loans to individuals, used for everything from car purchases and home improvements to debt consolidation, according to Moody’s Investors Service. Deutsche Bank AG is arranging the deal, called Marketplace Originated Consumer Assets 2016-1.

Funding Circle earlier this year orchestrated Europe’s first securitization of peer-to-peer loans, comprising small-business debt, as investors turn to riskier assets to boost returns dented by central-bank easing. Online lending is growing in Europe, particularly the U.K., as banks pare loans due to tougher capital regulations.

The loans in the new transaction were made by P2P Global via Zopa, the U.K.’s largest peer-to-peer lending platform. P2P Global invests in consumer and small-business loans, as well as trade receivables, originated on peer-to-peer platforms, according to its website. 

P2P Global’s shares rose 1 percent in London trading to 838.50 pence. They’ve dropped 17 percent this year.

Zopa, which was founded in 2005, has facilitated more than 1.7 billion pounds of peer-to-peer loans, according to its website.

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