May 17, 2019
Hunton Andrews Kurth represented Jefferies Funding LLC (Jefferies) in its role as note purchaser and lender in connection with a $1 billion variable funding financing facility of Home Equity Lines of Credit (HELOCs) with Figure Lending LLC (Figure Lending) in a first-of-its-kind financing transaction involving collateral originated on blockchain.
Figure Lending, a blockchain lending startup with more than 100 employees in offices in California, Nevada, Montana and Utah, has changed home equity lending by using cutting-edge technology in the origination process.
The startup recently developed Provenance.io, a blockchain platform used to originate, finance and sell HELOCs to banks, asset managers and credit funds. This technology has afforded Figure Lending the ability to originate more than $59 million of HELOCs in the last month–providing clients with an aggressive five-minute approval and five-day funding to borrowers.
Brian McGrath, head of the Securitized Markets Group at Jefferies, said “We’ve gained full transparency into the underlying assets, real-time access to loan performance and the process of accepting collateral has less friction than off chain.”
This deal effectively paves the way for the first structured financing on blockchain, demonstrating the cost savings, risk reduction and liquidity benefits that blockchain can deliver.
The Hunton Andrews Kurth deal team, led by structured finance lawyers Steven Becker and Jonathan Kim, included Rachael Craven, Abigail Lyle, Cary Tolley and Scott Kimpel.