When you invest in a Note, you are investing in an obligation of LendingClub. Borrowers make payments on their loans to LendingClub, and in turn, LendingClub distributes payments to investors in the Notes net of fees. If LendingClub were to go out of business, investors may not receive the full amount of payments due and to become due on the Note, or such payments may be delayed as bankruptcy or other proceedings make their way through the courts.  

We have taken steps to ensure continuity to protect investors and borrowers if LendingClub were to go out of business. For example, we have executed a backup and successor servicing agreement with Portfolio Financial Servicing Company (“PFSC”). Under this agreement, PFSC stands ready to service borrower loans.

Following five business days’ prior written notice from us or from the indenture trustee for the Notes, PFSC will begin servicing the loans. If the underlying loans are determined to be part of LendingClub’s bankruptcy estate, PFSC may not be able to make payments on the Notes. If our agreement with PFSC were to be terminated, we would seek to replace PFSC with another backup servicer.

Read more about the specific risks of investing with LendingClub at: https://www.lendingclub.com/public/risk-of-investing.action.