Research: Rating Action: Moody’s Assigns Final Ratings to Upstart Securitization Trust 2022-3

Approximately $196.4 million of rated asset-backed securities

New York, July 06, 2022 — Moody’s Investors Service (“Moody’s”) has assigned final ratings to notes issued by Upstart Securitization Trust 2022-3 (“UPST 2022-3”), the third personal loan securitization issued by UPST plateau this year. The collateral supporting UPST 2022-3 consists of unsecured consumer installment loans issued by Cross River Bank, a New Jersey state-chartered commercial bank and FinWise Bank, a state-chartered commercial bank. Utah, all of which use the Upstart program, respectively. Upstart Network, Inc. (“Upstart”) will act as loan servicer.

The full rating actions are as follows:

Issuer: Upstart Titrization Trust 2022-3

$166,653,000, 5.50%, Class A Notes, final assigned rating A3 (sf)

$29,760,000, 8.50%, Class B Notes, final assigned rating Ba2 (sf)


Ratings are based on the quality of the underlying collateral and its expected performance, the strength of the capital structure and the rapid amortization of assets, Upstart’s experience and expertise as a servicer, and the relief service agreement with Wilmington Trust, National Association and its designated sub-agent Systems & Services Technologies, Inc. (OH&S unclassified).

Moody’s median cumulative net loss expectation for the 2022-3 pool is 16.2% and stress loss is 56.0%. Moody’s based its cumulative net loss expectation on an analysis of the credit quality of the underlying collateral; historical performance of similar collateral, including securitization performance and managed portfolio performance; Upstart’s ability to perform its service functions; the ability of Wilmington Trust, National Association and its sub-agent to perform backup service functions; and current expectations regarding the macroeconomic environment during the term of the transaction.

At closing, the Class A and Class B notes are expected to benefit from 30.5% and 18.0% firm credit enhancement. The firm credit enhancement for the Notes consists of a combination of overcollateralization and a non-declining reserve account. Notes may also benefit from an excess spread.

The social risk of this transaction is high. Marketplace lenders have attracted high levels of regulatory attention at the state and federal levels. As such, regulatory and borrower challenges to marketplace lenders and their third-party lending partners regarding “true lender” status and interest rate exporting could result in certain loans being void or unenforceable. of Upstart, in whole or in part.


The main methodology used in these ratings was “Moody’s Approach to Rating Consumer Loan-Backed ABS” published in September 2021 and available at Otherwise, please see the Scoring Methodologies page on for a copy of this methodology.

Factors that would lead to an upgrade or downgrade of ratings:

At the top

Moody’s may upgrade the ratings if, given current expectations of portfolio losses, the levels of credit enhancement are consistent with higher ratings. In sequential payment structures, such as that of this transaction, credit enhancement increases as a percentage of the collateral balance as collections repay senior notes. Moody’s expectations for pool losses could decline due to better-than-expected economic improvements, changes in service practices that improve recoveries, or refinancing opportunities that result in prepayments. In addition, greater certainty regarding the legal and regulatory risks that this transaction faces could lead to lower loss volatility assumptions, and thus lead to a repricing of bonds.


Moody’s could downgrade bond ratings if pool losses exceed its expectations and credit enhancement levels are consistent with lower ratings. The credit enhancement may decrease if the excess spread is not sufficient to cover losses in any given month. Moody’s expectation of pool losses may increase, for example, due to deterioration in performance resulting from a slowing U.S. economy, poor service, errors on the part of parties to transaction, inadequate transaction governance or fraud. In addition, legal and regulatory risks arising from the partner banking model used by Upstart could expose the pool to increased losses.


For details on key rating assumptions and Moody’s sensitivity analysis, see the Methodological Assumptions and Sensitivity to Assumptions sections in the Disclosure Form. Moody’s rating symbols and definitions can be found at

Further information on representations, warranties and enforcement mechanisms available to investors can be found at

The analysis includes an evaluation of collateral characteristics and performance to determine expected collateral loss or a range of collateral losses or expected cash flows for rated instruments. In a second step, Moody’s estimates collateral losses or expected cash flows using a quantitative tool that takes into account credit enhancement, loss allocation and other structural characteristics, to derive the loss expected for each scored instrument.

Moody’s quantitative analysis involves an evaluation of scenarios that focus on factors contributing to rating sensitivity and consider the likelihood of material collateral losses or impaired cash flows. Moody’s weights the impact on rated instruments based on its assumptions of the likelihood of events in such scenarios occurring.

For ratings issued on a program, series, category/class of debt or security, this announcement provides certain regulatory information regarding each rating of a subsequently issued bond or note of the same series, category/class of debt, security or under a program for which ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a media provider, this announcement provides certain regulatory information relating to the credit rating action on the media provider and each particular credit rating action for securities whose credit ratings are derived from the support provider’s credit rating. For the provisional ratings, this press release provides certain regulatory information relating to the provisional rating assigned, and to a final rating that may be assigned after the final issuance of the debt, in each case where the structure and conditions of the transaction n have not changed prior to the final rating being assigned in a way that would have affected the rating. For more information, please see the issuer/transaction page of the respective issuer at

For all relevant securities or rated entities receiving direct credit support from the lead entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action , the associated regulatory information will be that of the guarantor entity. Exceptions to this approach exist for the following information, if applicable to the jurisdiction: Ancillary services, Information to be provided to the rated entity, Information to be provided by the rated entity.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued without modification as a result of such disclosure.

These notes are solicited. Please refer to Moody’s Policy for the Designation and Assignment of Unsolicited Credit Ratings available on its website.

The regulatory information contained in this press release applies to the credit rating and, if applicable, the outlook or rating revision relating thereto.

Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis are available at

At least one ESG consideration was material to the announced credit rating metric(s) described above.

The worldwide credit rating on this credit rating announcement was issued by one of Moody’s affiliates outside the EU and is approved by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Main. -le-Main 60322, Germany, in accordance with Article 4(3) of Regulation (EC) No 1060/2009 on credit rating agencies. Further information on the EU approval status and the Moody’s office that issued the credit rating can be found at

The worldwide credit rating on this credit rating announcement has been issued by one of Moody’s affiliates outside the UK and is approved by Moody’s Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the United Kingdom. . Further information on the UK endorsement status and the Moody’s office that issued the credit rating can be found at

Please see for any updates on changes to the lead rating analyst and Moody’s legal entity that issued the rating.

Please see the issuer/transaction page at for additional regulatory information for each credit rating.

Selven Veeraragoo
Vice President – Senior Analyst
Structured Finance Group
Moody’s Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
JOURNALISTS: 1 212 553 0376
Customer service: 1 212 553 1653

Pedro Sancholuz Ruda
VP – Senior Credit Officer
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Customer service: 1 212 553 1653

Release Office:
Moody’s Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
JOURNALISTS: 1 212 553 0376
Customer service: 1 212 553 1653

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