We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
LendingClub in Discussion with Citigroup for Loan Financing
Read MoreHide Full Article
LendingClub Corporation (LC - Free Report) is said to be in discussion with Citigroup Inc. (C - Free Report) to get financing for its future loans. The news about this prospective deal was first reported by the Wall Street Journal.
According to a person with knowledge of the matter, Citigroup may arrange more funding for the debts that LendingClub provides either by buying loans or providing financing for others to do so.
“We are productively engaged with LendingClub on a number of fronts,” a spokeswoman for Citigroup said in an e-mailed statement.
If the deal comes through, it will help LendingClub to restore investor confidence, which was shaken after the surprise resignation of the company’s founder and chief executive officer, Renaud Laplanche. This subsequently led buyers of the company’s loans to pull out causing further damage to investor confidence.
Troubles started for the online loan platform after the forced resignation of Laplanche following an internal review that revealed a violation of the company’s business practices.
The internal investigation was into sales of $22 million in near-prime loans to a single investor. The company said it made the sale in a fashion that went against the investor’s instructions. Some debts were misdated and Laplanche failed to properly disclose an investment.
The resignation came after LendingClub’s board discovered that employees had falsified data on some loans sold to an investment bank, Jefferies. In its quarterly filing, LendingClub revealed that several large investors are reluctant to invest and have paused their investments in loans in the wake of Laplanche's resignation. This could have a material effect on the company’s performance.
Last year, Citigroup and LendingClub had entered in a separate tie-up to facilitate up to $150 million in loans designed to provide more affordable credit to underserved borrowers and communities.
According to a Wall Street Journal report earlier this month, The Goldman Sachs Group, Inc. (GS - Free Report) had been working with LendingClub to help it determine the best way to access capital markets.
Currently, LendingClub holds a Zacks Rank #4 (Sell). A better-ranked firm in the same space isEuronet Worldwide, Inc. (EEFT - Free Report) with a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
LendingClub in Discussion with Citigroup for Loan Financing
LendingClub Corporation (LC - Free Report) is said to be in discussion with Citigroup Inc. (C - Free Report) to get financing for its future loans. The news about this prospective deal was first reported by the Wall Street Journal.
According to a person with knowledge of the matter, Citigroup may arrange more funding for the debts that LendingClub provides either by buying loans or providing financing for others to do so.
“We are productively engaged with LendingClub on a number of fronts,” a spokeswoman for Citigroup said in an e-mailed statement.
If the deal comes through, it will help LendingClub to restore investor confidence, which was shaken after the surprise resignation of the company’s founder and chief executive officer, Renaud Laplanche. This subsequently led buyers of the company’s loans to pull out causing further damage to investor confidence.
Troubles started for the online loan platform after the forced resignation of Laplanche following an internal review that revealed a violation of the company’s business practices.
The internal investigation was into sales of $22 million in near-prime loans to a single investor. The company said it made the sale in a fashion that went against the investor’s instructions. Some debts were misdated and Laplanche failed to properly disclose an investment.
The resignation came after LendingClub’s board discovered that employees had falsified data on some loans sold to an investment bank, Jefferies. In its quarterly filing, LendingClub revealed that several large investors are reluctant to invest and have paused their investments in loans in the wake of Laplanche's resignation. This could have a material effect on the company’s performance.
Last year, Citigroup and LendingClub had entered in a separate tie-up to facilitate up to $150 million in loans designed to provide more affordable credit to underserved borrowers and communities.
According to a Wall Street Journal report earlier this month, The Goldman Sachs Group, Inc. (GS - Free Report) had been working with LendingClub to help it determine the best way to access capital markets.
Currently, LendingClub holds a Zacks Rank #4 (Sell). A better-ranked firm in the same space isEuronet Worldwide, Inc. (EEFT - Free Report) with a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>