LendingClub taps Jefferies to seek loan funding: sources

Fri May 20, 2016 4:35pm EDT
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By Olivia Oran and Greg Roumeliotis

(Reuters) - LendingClub Corp (LC.N: Quote) has hired investment bank Jefferies LLC to help it find investors for loan funding, people familiar with the matter said on Friday, as the U.S. online lender seeks to replenish investments after a probe over the sale of some of its loans.

A number of LendingClub's largest investors have halted purchases of its loans, the company said in a quarterly filing this week, after an internal company probe found it had falsified documentation when selling a $22 million package of loans to an investor, which sources have said is Jefferies.

Since then, LendingClub has tapped Jefferies to reach out to new potential investors to sell loans directly, including alternative asset managers such as Apollo Global Management LLC (APO.N: Quote), Fortress Investment Group LLC (FIG.N: Quote) and J.C. Flowers & Co, the people said this week.

It was not clear which investors will participate in the latest effort. Apollo, Fortress and J.C. Flowers declined to comment. Jefferies also declined to comment.

U.S. bank Citigroup (C.N: Quote) told U.S. regulators last week that it had rebuffed a request from Jefferies to support LendingClub, according to a May 12 memo seen by IFR, a member of the Thomson Reuters group. Citigroup declined to comment.

In a statement, LendingClub said it had been approached by a number of existing and potential new investors about large purchases of loans.

"We respect and understand our partners’ needs to conduct due diligence, are engaged in constant, productive discussions, and are encouraged by the progress," the company said.

"These are complex discussions that by their nature will take some time to complete. Meanwhile, our platform continues to operate with existing investors and more returning each day."   Continued...

A woman looks at her phone as she passes by a Lending Club banner on the facade of the the New York Stock Exchange December 11, 2014.  REUTERS/Brendan McDermid