Mission Lane Completes Inaugural $320 Million ABS Transaction and Raises $150M in Redeemable Preferred Equity
Mission Lane, a purpose-driven financial technology company, today announced the closing of its debut asset backed securitization and of $150 million in redeemable preferred equity in a series led by funds managed by Oaktree Capital Management, L.P. ("Oaktree"), an existing investor in the company, and joined by Invus, QED Investors, and LL Funds.
In the securitization transaction, which was meaningfully oversubscribed, Mission Lane sold $320 million of notes in three classes, all of which were rated by Kroll Bond Rating Agency. The transaction represents the first step for Mission Lane in becoming a programmatic issuer in the securitization market.
Mission Lane provides high quality, transparent and data-driven products and experiences for people trying to build or rebuild their credit and improve their financial lives. Currently offering a variety of market-leading credit cards and personal financial management tools, the company will utilize the additional debt and equity funding to continue its rapid growth and develop new digital banking and lending products, while optimizing its cost of capital.
"Since launching as a standalone company over two years ago we have demonstrated that providing innovative products and a superior digital experience can deliver success in our target market," said Shane Holdaway, Chief Executive Officer of Mission Lane. "We welcome the robust response and oversubscription our initial securitization transaction received from a broad group of sophisticated investors. Most of all, we're pleased that we can utilize this tool to lower our cost of capital and in turn serve more customers with transparent, reasonably priced financial solutions that improve their lives and put them on a path to financial empowerment. Further, by raising additional equity capital from our partners such as Oaktree we can invest further in expanding our product suite and our team, enabling us to accelerate our robust growth trajectory."
Earlier this year, Mission Lane announced it added its one millionth customer to its market-leading credit card franchise. The company achieved over 100% revenue growth in 2020 and is on pace to double revenue again in 2021 as it works to expand its debit and digital banking offerings. In May of this year, the firm announced it had acquired Honeydue, a financial technology company providing digital applications and banking services to help consumers manage their finances and develop stronger financial literacy and habits.
Brian Laibow, Managing Director and Co-Head of North America for Oaktree's Global Opportunities strategy, said, "Mission Lane has proven its ability to thrive serving a customer-base that other fintech companies and traditional financial institutions have been unable to reach. Its deep expertise in data science and laser focus on solving customer problems has allowed it to secure high levels of consumer loyalty and establish a competitive advantage. We're proud to work with Shane and the team to support the company's continued growth."
FT Partners and Guggenheim Securities advised the company on the redeemable preferred equity raise.
Goldman Sachs and Guggenheim Securities served as joint lead managers for the securitization transaction.
About Mission Lane
Mission Lane is a purpose-driven financial services company that leverages advanced technology, data analytics, and machine learning to provide a dignified customer experience to people who are working hard to build or rebuild their credit and improve their financial lives. Mission Lane's credit cards have terms that are better and easier to understand than most of the alternatives available to people with less-than-pristine credit or limited credit history. The company's digital self-service tools also make it easier for customers to stay on top of their accounts, further helping them succeed in improving their credit scores. To date, the company has issued over a million of their best-in-class, mobile-first credit cards, earning top customer ratings on CreditKarma for their market segment. Mission Lane was established as a standalone company in December 2018. It had previously operated as the credit card division of LendUp.
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