LendingClub Corporation (NYSE: LC), the largest lender in the market in the United States, is expanding its LCX platform to provide offers and prices on loans before issuance. This market would operate up to the level of the individual loan, thus offering exceptional granularity, according to a press release.
LendingClub notes that when it first launched LCX, it allowed the company to sell previously issued loans held on the company’s balance sheet in a dynamic pricing environment. Dynamic pricing can now take place before origination.
These loans will not affect the company’s balance sheet, helping LendingClub preserve liquidity. The loans will be offered on the LendingClub Marketplace several times a day, according to the company.
“As a technology-driven market, we want to eliminate friction and encourage investors to trade electronically and accurately, whether pre-issue or post-issue, with LendingClub or among themselves. We believe this will result in increased liquidity of this asset class and add market functionality that was not previously available, ”said Patrick coicou, LendingClub Senior Director of Electronic Markets. “We plan to continue using new technologies to make this asset both more tradable and more investable while improving the investor experience on the platforms. We believe this development will be an important part of our goal of continuing to provide market-based rates for borrowers and competitive risk-adjusted returns for investors. “
Krubiner girl, CEO and co-founder of Pagaya Investments, said they were excited to work with LendingClub to create “market leading solutions:”
“This LCX extension is the next evolution for investors to identify risk and increase liquidity.”
LendingClub states that adopting electronic trading at LendingClub has enabled faster deployment of capital, better liquidity, price discovery, and an efficient and scalable order execution process.
Currently, LendingClub offers loans to institutional investors through four platforms:
- To select,
- Select More,
- and the combined LCX suite.
Member Payment Dependent Notes are also offered to retail investors by prospectus.
LendingClub plans to eventually replace the Select platform with LCX.