KBRA Assigns Preliminary Ratings to Upstart Securitization Trust 2019-2

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Upstart Securitization Trust 2019-2 (“UPST 2019-2”). This is a $358.4 million consumer loan ABS transaction that is expected to close on August 7, 2019.

This transaction is Upstart Network, Inc.’s (“Upstart” or the “Company”) sixth securitization of prime and near prime unsecured consumer loans overall and its second in 2019. The loans are facilitated by Upstart’s proprietary models supporting an online marketplace that connects borrowers and investors by offering consumer loans originated by Cross River Bank (“CRB”) through the platform, www.upstart.com (the “Upstart Program” or the “Program”). Upstart is a wholly owned subsidiary of Upstart Holdings, Inc.

Upstart was founded in February 2012 and the first unsecured consumer installment loan was issued in May 2014. As of July 1, 2019, the Upstart Program has issued over 290,000 loans for over $3.6 billion with 3Q18 originations of $427.8 million being the highest historical quarterly originations. Upstart’s Program uses a hybrid funding model to finance the loans originated by the Program. The majority of loans are sold to institutional investors. CRB retains approximately 10% to 15% of production, and the remaining minority is split between Upstart’s balance sheet and fractional retail investors.

The transaction has initial credit enhancement levels of 45.91%, 31.31% and 15.51% for the Class A, Class B and Class C notes, respectively. The reserve account will be funded at closing in the amount of 0.51% of the of the cutoff loan balance. 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 2019-2



Preliminary Rating


Expected Initial

Class Principal



A- (sf)





BBB- (sf)





BB- (sf)



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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.


Eric Neglia, Managing Director

(646) 731-2456

[email protected]

William Carson, Senior Director

(646) 731-2405

[email protected]

Michael Polvere, Senior Analyst

(646) 731-3339

[email protected]

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