Blue Owl to purchase up to $3.4 billion in LendingClub certificates

SAN FRANCISCO/NEW YORK - LendingClub Corporation (NYSE:LC), currently valued at $1.4 billion in market cap, announced Thursday that funds managed by Blue Owl Capital have agreed to purchase equity certificates and subordinated notes in LendingClub Structured Loan Certificate transactions valued at up to $3.4 billion over two years. According to InvestingPro data, the company maintains a "Fair" financial health score despite recent cash burn concerns.

The agreement includes anticipated closings on transactions valued up to $600 million in aggregate during the first three months, with additional purchases expected quarterly thereafter. The two companies have previously executed $2.4 billion worth of transactions through the SLCLC program. This deal comes as LendingClub’s stock has shown strong momentum, with a 45% return over the past year despite broader market volatility.

"Commitments like these speak to the strength of our underwriting through economic cycles," said Scott Sanborn, LendingClub CEO, in a press release statement.

Ivan Zinn, Head of Alternative Credit at Blue Owl, noted this marks their funds’ third investment with LendingClub since 2023.

LendingClub’s SLCLC program, launched in April 2023, has facilitated nearly $6 billion in loan sales. The program provides an investment process that doesn’t require external financing for loan buyers.

LendingClub operates as America’s digital marketplace bank, while Blue Owl (NYSE:OWL) manages $273 billion in assets as of March 31, 2025, according to the companies. With its earnings report due on July 29, investors can access comprehensive analysis and 15 additional key insights through InvestingPro’s detailed research reports, which indicate the stock is currently trading below its Fair Value.

The series notes and residual certificates issued through the SLCLC program have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

In other recent news, LendingClub reported its financial results for the first quarter of 2025, achieving a total net revenue of $218 million, which exceeded analyst expectations of $213.46 million. However, the company’s earnings per share (EPS) fell slightly short of forecasts, coming in at $0.10 against the anticipated $0.11. Meanwhile, BTIG analyst Vincent Caintic adjusted LendingClub’s price target from $20.00 to $14.00, citing increased marketing expenditures as a factor for flat pre-provision net revenue, but maintained a Buy rating on the stock. The analyst projects significant growth in loan originations and revenue over the next few years, with optimistic estimates for 2025 through 2027.

LendingClub also launched a new digital checking account, LevelUp Checking, offering cash back rewards for debit card purchases and personal loan payments. This product features no account fees, unlimited ATM rebates, and early paycheck access, aiming to enhance customer engagement and satisfaction. Furthermore, Citizens JMP initiated coverage on LendingClub with a Market Perform rating, indicating concerns about potential limited growth prospects due to competition and an uneven operating history. Despite these challenges, the firm acknowledged LendingClub’s expanding profitability and lower cost of capital.

These developments reflect LendingClub’s strategic efforts to diversify its offerings and capture market share, while navigating competitive pressures and macroeconomic uncertainties.

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