J.P. Morgan Acquires Nearly $1 Billion Worth of Lending Club Loans -- Sources

By Telis Demos 

J.P. Morgan Chase & Co. has agreed to acquire nearly $1 billion worth of personal loans arranged by LendingClub Corp., according to people familiar with the deal.

The portfolio, worth just over $900 million and comprising loans made to consumers with an average FICO score of about 700, was sold for a premium to the outstanding balance on the loans, one of the people said.

The sale was being closely watched by credit markets as an indicator of the health of the market for online personal loans.

The loans had been owned by Santander Consumer USA Holdings Inc., the subprime auto lender, which had acquired them as part of an agreement with Lending Club. But last year, Santander Consumer decided to scale back its personal loan business and initiated a sale of the portfolio.

There had been some concern that the value of the loans had diminished following Santander Consumer's markdown last week of some loans it held for sale, which could indicate that fewer borrowers were paying back their loans than expected. But the markdown hadn't affected the Lending Club loans, people familiar with the matter said.

A premium sale is generally considered a positive indicator for the loans.

Write to Telis Demos at [e-mail]

(END) Dow Jones Newswires

February 01, 2016 11:51 ET (16:51 GMT)

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