Agreement Signifies Strong Growth of Institutional Investor Marketplace
NEW YORK, Aug. 3, 2015 /PRNewswire/ — OnDeck® (NYSE: ONDK), a leading platform for small business lending, announced today that an affiliate of Jefferies Group LLC, the global investment banking firm, has entered into an amended forward purchase agreement giving Jefferies the ability to purchase up to $500 million in small business loans through OnDeck Marketplace® over the next 12 months.
OnDeck Marketplace is a platform that enables institutional investors to purchase small business loans originated by OnDeck.
OnDeck Marketplace has grown substantially since it first launched in late 2013, making up 34% of OnDeck’s term loan originations during the second quarter of 2015, up from 24% in the first quarter of 2015.
Jefferies began its relationship with OnDeck Marketplace in March 2014. Jefferies’ interest in OnDeck Marketplace aligns with the overall growth of the platform as OnDeck continues gaining scale and diversifying its funding sources.
“Marketplace allows institutional investors to participate in the emerging small business loan asset class at scale,” said Howard Katzenberg, chief financial officer, OnDeck. “The agreement not only demonstrates Jefferies’ interest in Marketplace, but it also gives them the ability to expand their portfolio and help even more small businesses get the capital they need to grow.”
“We look forward to continuing to work with our client, OnDeck, and its lending platform to structure and deliver innovative investment opportunities to our capital markets investor clients,” said Michael Wade, managing director, Jefferies.
OnDeck Marketplace participants include institutional investors, asset managers, hedge funds and business development companies. To use the platform, each institutional investor opens its own OnDeck Marketplace account, purchases loans on a programmatic basis, and then receives daily principal and interest payments from the loans it owns. OnDeck services the loans institutions purchase, making the process seamless, transparent and efficient.
Loans in OnDeck Marketplace are assigned one of six grades primarily based on their OnDeck Score®, and these grades set the prices institutional investors pay for individual loans. These comprehensive metrics allow OnDeck and institutional investors to better evaluate risk when making small business loan decisions.
OnDeck (NYSE: ONDK), a leading platform for small business lending, is committed to increasing Main Street’s access to capital. OnDeck uses advanced lending technology and analytics to assess creditworthiness based on actual operating performance and not solely on personal credit. The OnDeck Score®, the company’s proprietary small business credit scoring system, evaluates thousands of data points to deliver a credit decision rapidly and accurately. Small businesses can apply for a line of credit or term loan online in minutes, get a decision immediately and receive funds in as fast as the same day. OnDeck also partners with small business service providers, enabling them to connect their customers to OnDeck financing. OnDeck’s diversified loan funding strategy enables the company to fund small business loans from various credit facilities, securitization and the OnDeck Marketplace®, a platform that enables institutional investors to purchase small business loans originated by OnDeck.
Since 2007, OnDeck has deployed more than $2 billion to more than 700 different industries in all 50 U.S. states, and also makes small business loans in Canada. The company has an A+ rating with the Better Business Bureau and operates the website BusinessLoans.com which provides credit education and information about small business financing. On December 17, 2014, OnDeck started trading on the New York Stock Exchange under the ticker ONDK.
Jefferies, the global investment banking firm focused on serving clients for over 50 years, is a leader in providing insight, expertise and execution to investors, companies and governments. The firm provides a full range of investment banking, sales, trading, research and strategy across the spectrum of equities, fixed income and foreign exchange, as well as wealth management, in the Americas, Europe and Asia. Jefferies Group LLC is a wholly-owned subsidiary of Leucadia National Corporation (NYSE: LUK), a diversified holding company.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other legal authority. Forward-looking statements can be identified by words such as “will,” “enables,” “expects,” “allows,” “continues,” “believes,” “anticipates,” “estimates” or similar expressions. These include statements regarding the prospects for OnDeck Marketplace, the expected expansion of OnDeck’s business dealings with affiliates of Jefferies Group LLC pursuant to the forward purchase agreement, and the possible impact of Jefferies’ interest in the program. Forward-looking statements are neither historical facts nor assurances of future performance. They are based only on our current beliefs, expectations and assumptions regarding the future of our business, anticipated events and trends, the economy and other future conditions. As such, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and in many cases outside our control. Therefore, you should not rely on any of these forward-looking statements. Our expected results may not be achieved, and actual results may differ materially from our expectations. Factors that could cause or contribute to actual results to differing from our forward-looking statements include risks relating to: institutional investors (including entities affiliated with Jefferies) not participating, continuing to participate, or increasing their participation in OnDeck Marketplace as currently expected, OnDeck Marketplace failing to provide or continuing to provide attractive returns to Jefferies’ affiliates and other institutional investors, failure of OnDeck to originate sufficient qualified small business loans to sell to Jefferies’ affiliates and other institutional investors and other risks, including those described in our Annual Report on Form 10-K for the year ended December 31, 2014, and in other documents that we file with the Securities and Exchange Commission from time to time which are or will be available on the Commission’s website at www.sec.gov. Except as required by law, we undertake no duty to update the information in this press release.
Kathryn Harmon Miller
OnDeck, the OnDeck logo, OnDeck Score and OnDeck Marketplace are trademarks of On Deck Capital, Inc.