Mission Lane completes US$320mn ABS transaction

Mission Lane, a leading purpose-driven finserve company that leverages advanced technology, data analytics, and machine learning to improve the customer experience, has completed its inaugural US$320mn ABS transaction.

The company, which is based in the US, with offices in Richmond, Virginia and San Francisco, has also raised $150mn 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.

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.

Mission Lane ABS transaction

In the securitization transaction, which was meaningfully oversubscribed, Mission Lane sold $320mn 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.

FT Partners and Guggenheim Securities advised the company on the redeemable preferred equity raise. Goldman Sachs and Guggenheim Securities also served as joint lead managers for the securitization transaction.

Speaking about the event, Shane Holdaway, Chief Executive Officer of Mission Lane, explained, “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.”

He continued, “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 utilise 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.”

Mission Lane growth strategy

Holdaway went on to say that by raising additional equity capital from its partners such as Oaktree, Mission Lane can invest further in expanding its product suite and its team, enabling the fintech company to accelerate its robust growth trajectory.

Mission Lane recently announced it had enrolled its one-millionth customer to its market-leading credit card franchise. 

To date, the company generated more than 100% revenue growth in 2020 and is on track to double revenue again in 2021 as it expands its debit and digital banking offerings.

Mission Lane also acquired the fintech Honeydue in May, which provides 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.”

He added, “We’re proud to work with Shane and the team to support the company’s continued growth.”