Marketplace Consumer Loan ABS Indices: November 2023

November remittance reports showed weaker credit performance across securitized marketplace consumer loan pools during the October collection period. Annualized net losses in our Tier 1 and Tier 2 indices climbed to 9.08% and 19.05%, respectively, up 51 basis points (bps) month-over-month (MoM) and 314 bps year-over-year (YoY) in the Tier 1 index and 165 bps MoM and 414 bps YoY in our Tier 2 index (see Figure 1). Meanwhile, the percentage of borrowers that were 30+ days past due increased 44 bps MoM and 68 bps YoY to 4.05% in our Tier 1 index, and 54 bps MoM and 127 bps YoY to 7.26% in our Tier 2 index (see Figure 2).

As long as the labor market remains tight, we think it is likely that credit performance will soften a bit more through year-end, as holiday spending weighs on borrower finances, but will remain mostly range-bound in 2024, as many of the originators we rate have tightened their underwriting standards over the past year.

The data shown in this report and other indices…