Capital markets News

Jefferies, JPM, Goldman underwrite Figure’s blockchain-based and rated ABS

blockchain home loans

Today Figure announced its latest asset backed security (ABS) issuance based on home equity line of credit (HELOC) loans that were all logged on the Provenance public blockchain founded by Figure. This is the first Figure ABS issuance that was rated. DBRS Morningstar gave a AAA rating for the Class A notes and A(low) for Class B. The ABS is underwritten by Jefferies, JP Morgan and Goldman Sachs.

“Launching this rated transaction is an inflection point in capital markets, ultimately supporting more liquidity to U.S. homeowners,” said Mike Cagney, CEO and Co-founder of Figure. The company previously sued the Asset Backed Alert over comments about the quality of one of its first ABS issuances.

The ABS funding enables Figure to recycle the proceeds into more loans. According to Figure, by the end of 2022, its cumulative HELOC originations were more than $5 billion across 70,000 homes. 

In late 2021 Figure announced a merger with mortgage lender Homebridge, but it was canceled in mid-2022 when regulatory approval was not forthcoming. 

Figure has a dizzying array of activities and has experienced regulatory headwinds in several initiatives. It wanted a banking license for the payment app Figure Pay but didn’t get one. It co-founded one of the most interesting payment initiatives in the banking world, the USDF Consortium for tokenized bank deposits. That also faces headwinds with any bank involvement in blockchain requiring specific regulatory approval, all the more so because the USDF has an ambitious plan.

However, Figure did receive approval for an Alternative Trading System (ATS) to create a marketplace for tokenized equity and funds. It has relationships with Apollo and Hamilton Lane for funds.

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