KBRA Assigns Preliminary Ratings to Upstart Securitization Trust 2019-3

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Upstart Securitization Trust 2019-3 (“UPST 2019-3”). This is a $346.4 million consumer loan ABS transaction that is expected to close on November 26, 2019.

This transaction (“UPST 2019-3”) is Upstart Network, Inc.’s (“Upstart” or the “Company”) seventh securitization of prime and near prime unsecured consumer loans since inception and its third in 2019. Upstart is a marketplace lending platform that facilitates the origination of prime and near prime unsecured consumer loans. Upstart was founded in February 2012 and the first unsecured consumer installment loan was originated through the program in May 2014.

As of September 30, 2019, approximately 350,000 loans for approximately $4.4 billion have been originated under Upstart’s online marketplace lending program. The majority of loans are sold to institutional investors. CRB retains approximately 12% of production, and the remaining majority is split between institutional investors (approximately 80%), Upstart’s balance sheet via 2 warehouses (approximately 7%) and fractional investors (approximately 1%).

The transaction has initial credit enhancement levels of 44.15%, 29.40% and 13.30% for the Class A, Class B and Class C notes, respectively. The reserve account will be funded at closing in the amount of at least 0.50% of the cutoff loan balance multiplied by the Non-Retained Interest amount and does not decline unless drawn upon to cover interest shortfalls or other payments as outlined in the priority of payments. The transaction includes a cumulative net loss amortization trigger, which if breached, will cause the transaction to enter a full turbo amortization while the trigger is in breach.

KBRA applied its Global Consumer Loan ABS Rating Methodology and its Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Upstart’s historical gross loss data. KBRA also conducted an operational assessment of the Upstart Program, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

To access ratings, reports and disclosures, click here.

Preliminary Ratings Assigned: Upstart Securitization Trust 2019-3


Preliminary Rating

Expected Initial Class Principal


A- (sf)



BBB- (sf)



BB- (sf)


Related Publications: (available at www.kbra.com)



About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.


Analytical Contacts:

Eric Neglia, Managing Director

(646) 731-2456


William Carson, Senior Director

(646) 731-2405


Michael Polvere, Senior Analyst

(646) 731-3339


Business Development Contact:

Ted Burbage, Managing Director

(646) 731-3325


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