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Matheson advises on Funding Circle’s / Europe’s First STS Platform Lending Securitisation
KEY CONTACT(S): Alan Keating, Turlough Galvin, Kevin Smith, Margot Carty
PRACTICE AREA GROUP: Structured Finance and Securitisation, Finance and Capital Markets, Tax, Listing Services
Matheson recently acted as Irish legal and tax counsel, and Irish listing agent, to an Irish securitisation vehicle in connection with the £250,000,000 Small Business Origination Loan Trust 2019-3 DAC (“SBOLT”) securitisation of approximately 3,000 UK SME loans that were originated through Funding Circle in the UK. Funding Circle is the leading SME loans platform in the UK, US, Germany and the Netherlands and has facilitated the lending of over £8 billion to 77,000 businesses by more than 90,000 investors across these four markets. Investors include individuals, banks, asset management companies, insurance companies, government-backed entities and funds. The notes issued by SBOLT were listed on the Main Securities Market of Euronext Dublin.
The transaction is intended to qualify as a simple, transparent and standardised (“STS”) securitisation within the meaning of Article 18 of the Securitisation Regulation, which may benefit from lower capital requirements for institutional investors.
The transaction represents Funding Circle’s fifth successful securitisation of UK SME loans to date following their (and Europe’s) first platform lending securitisation in 2016 (in respect of which Matheson also acted as Irish legal and tax counsel, and Irish listing agent). It is the first securitisation of SME loans originated by Funding Circle, in which Funding Circle acted as one of the risk retention holders (along with Glencar XI Designated Activity Company), and is also Funding Circle’s first STS labelled securitisation under the Securitisation Regulation which came into effect on 1 January 2019.
Alan Keating, Partner in Matheson’s Finance and Capital Markets Department, who led the Matheson team advising on the transaction, commented:
“We are delighted to have worked with Funding Circle on yet another very successful securitisation (representing Funding Circle’s first STS labelled securitisation) of UK SME loans originated via Funding Circle’s UK online lending platform. It demonstrates both parties’ continued commitment to the platform lending industry as a whole that continues to play a pivotal role in bridging the funding gap in the SME credit market.”
Alan Keating was assisted by Finance and Capital Markets partner, Turlough Galvin, Tax partner, Kevin Smith, Finance and Capital Markets senior associate, Micheál Buckley and Head of Listing Services, Margot Carty.