Peer-to-peer mortgage lending platform, LendInvest, has has completed a peer-to-peer loan which was split into different tranches, which it is hailing a “world-first” for the platform.
LendInvest has now started offering tranche loans on its platform, which allows investors to choose a tranche within a particular loan, according to an investor’s own risk and return profile.
Other peer-to-peer platforms have sought to allocate a risk profile to individual loans, designating the risk profile of the loan according to their own criteria. However, LendInvest is now offering investors the ability to invest in different tranches within a single loan. Tranche A is the lowest risk portion of the loan, and Tranche B is subordinated to Tranche A, and so on.
The first Tranche Loan on LendInvest was a loan for £365,250, against a property in Croydon. It was a short term bridging loan with a duration of nine months. Tranche A of the loan was for £200,000 offering investors a net return of 0.7% per month; and the subordinated Tranche B of the loan, was for £165,250 offering investors a net return of 1.0% per month.
Christian Faes, co-founder of LendInvest, said: “This is another first for LendInvest, as we continue to show our ability to innovate and provide investors with the best investment solution.
“As a true peer-to-peer investment platform, investors have the ability to select the actual loan that they invest in. As part of this, an investor is able to see all of the relevant information on the property that they are lending against, and the borrower’s situation. With tranche loans, investors now have the added flexibility of being able to choose where in the capital stack they invest.
“Our new tranche loans allow investors to choose the level of risk that they are comfortable with, within a single mortgage loan, and to adjust their investment return accordingly.”
