On Deck Capital Inc (NYSE:ONDK), a leading platform for small business lending, announced today that an affiliate of Jefferies Group LLC, the global investment banking firm, has entered into an amended forward purchase agreement giving Jefferies the ability to purchase up to $500 million in small business loans through OnDeck Marketplace® over the next 12 months.
OnDeck Marketplace is a platform that enables institutional investors to purchase small business loans originated by OnDeck.
OnDeck Marketplace has grown substantially since it first launched in late 2013, making up 34% of OnDeck’s term loan originations during the second quarter of 2015, up from 24% in the first quarter of 2015.
Jefferies began its relationship with OnDeck Marketplace in March 2014. Jefferies’ interest in OnDeck Marketplace aligns with the overall growth of the platform as OnDeck continues gaining scale and diversifying its funding sources.
“Marketplace allows institutional investors to participate in the emerging small business loan asset class at scale,” said Howard Katzenberg, chief financial officer, OnDeck. “The agreement not only demonstrates Jefferies’ interest in Marketplace, but it also gives them the ability to expand their portfolio and help even more small businesses get the capital they need to grow.”
“We look forward to continuing to work with our client, OnDeck, and its lending platform to structure and deliver innovative investment opportunities to our capital markets investor clients,” said Michael Wade, managing director, Jefferies.
OnDeck Marketplace participants include institutional investors, asset managers, hedge funds and business development companies. To use the platform, each institutional investor opens its own OnDeck Marketplace account, purchases loans on a programmatic basis, and then receives daily principal and interest payments from the loans it owns. OnDeck services the loans institutions purchase, making the process seamless, transparent and efficient. (Original Source)
Following the news, shares of On Deck Capital are down 2.77% to $13 in after-hours trading. ONDK has a 1-year high of $28.98 and a 1-year low of $12.92. The stock’s 50-day moving average is $12.51 and its 200-day moving average is $16.65.
On the ratings front, On Deck Capital has been the subject of a number of recent research reports. In a report issued on August 1, Canaccord Genuity analyst Michael Graham initiated coverage with a Buy rating on ONDK and a price target of $24, which implies an upside of 78.2% from current levels. Separately, on July 28, BTIG’s Mark Palmer reiterated a Buy rating on the stock and has a price target of $25.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Graham and Mark Palmer have a total average return of 14.2% and -2.8% respectively. Graham has a success rate of 53.7% and is ranked #225 out of 3724 analysts, while Palmer has a success rate of 46.3% and is ranked #3377.
The street is mostly Bullish on ONDK stock. Out of 5 analysts who cover the stock, 3 suggest a Buy rating , 1 suggest a Sell and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $26.00, which represents a potential upside of 93.0% from where the stock is currently trading.
On Deck Capital Incalong with its subsidiaries is engaged in providing financing products to small businesses located throughout the United States, including term loans and lines of credit.