Alliant Credit Union today announced that its loan trading desk sold $186.5 million and acquired $89 million in commercial and consumer loan participations in the first quarter of 2021. Alliant’s trading partners in the 18 transactions included credit unions nationwide. This volume follows a successful 2020 wherein Alliant closed sales transactions totaling $219.7 on the year.
A portion of the first quarter activity included sales of commercial real estate participations to six different credit unions on a multifamily property in suburban Chicago and another on a large, high-performing recreational vehicle resort community in the Northeast United States. Alliant also sold four pools of consumer loans secured by recreational vehicles in the first quarter.
“We’re seeing significant momentum as we expand our partnerships with other credit unions that seek loans backed by institutional-quality properties,” said Charles Krawitz, Vice President, who leads commercial lending and loan trading at Alliant. “Furthermore, our national network of commercial mortgage bankers allow us to access to high-quality transactions, and those relationships have deepened as we meet with continued success.”
While Alliant seeks to mitigate risk in its loan portfolio by buying and selling loan participations, the credit union retains servicing for loans that it sells. This ensures that the loans continue to be serviced as Alliant’s own and limits volatility in servicing, which has led to loss rates below industry standards across its loan participations.
“Alliant is a valued partner for us. As a commercial real estate loan participations buyer, we are very discerning in choosing our originator partners, and Alliant’s commercial team stands out for originating well-located, institutional quality properties owned by experienced sponsors,” said Duane Hewlett, Director, CRE Portfolio Management, Northrop Grumman Federal Credit Union. “Our recent purchase of a participation in a multifamily property from Alliant is a case in point. This well-maintained property is located in a strong suburban Chicago submarket, and the sponsors have considerable experience in the multifamily asset class and with this specific property.”
Fintech partnerships for consumer solar loans
On the acquisitions side, Alliant purchased $89,000,000 in participations in two consumer solar loan pools. Although Alliant purchased the solar loan participations from two credit unions, the loans were originated by two financial technology—“fintech”—online banking companies.
“Solar loans complement other types of consumer products in which we are experienced, such as home equity lines of credit and mortgages, with an attractive risk-return ratio because borrowers tend to pay off their solar loans when they sell or refinance their homes,” said Krawitz. “Loan purchases provide the opportunity for our members to benefit from a growing sector while we explore partnering with fintech originators.”