Business
Newtek Closes its 11th S&P-Rated Loan Securitization with the Sale of $103.4 Million of SBA 7(a) Unguaranteed Loan-Backed Notes Series 2021-1
Company Reaffirms Forecasts Across Several Metrics BOCA RATON, Fla., Dec. 09, 2021 (GLOBE NEWSWIRE) -- Newtek Business Services Corp., (NASDAQ: NEWT), an
About this update from Newtekone, Inc.
[{"type":"text","content":"Company Reaffirms Forecasts Across Several Metrics\nBOCA RATON, Fla., Dec. 09, 2021 (GLOBE NEWSWIRE) -- Newtek Business Services Corp., (NASDAQ: NEWT), an internally managed business development company (“BDC”), today announced that it has closed its eleventh small business loan securitization, with the sale of $103,430,000 of Unguaranteed SBA 7(a) Loan-Backed Notes, Series 2021-1, consisting of $79,680,000 of Class A Notes and $23,750,000 Class B Notes (collectively, the “Notes”), rated “A” and “BBB-”, respectively, by S&P Global, Inc. (“S&P”). The Notes had an 82.50% advance rate, and were priced at an average initial yield of approximately 2.02% (Note interest rates are floating rate and adjust monthly), which is equivalent to a spread of 192 basis points over LIBOR, across both classes. The Notes are collateralized by the right to receive payments and other recoveries attributable to the unguaranteed portions of SBA 7(a) loans made by Newtek Small Business Finance, LLC (\"NSBF\") pursuant to Section 7(a) of the Small Business Act, and overcollateralized by NSBF's participation interest in the unguaranteed portions. Deutsche Bank Securities and Capital One Securities acted as joint book running managers for the transaction. Barry Sloane, Chairman, President and Chief Executive Officer of Newtek Business Services Corp. said, “We are extremely pleased that NSBF was able to issue its eleventh securitization, as we have reestablished our core SBA 7(a) lending business. According to data from the Small Business Administration (“SBA”), NSBF is ranked by dollar origination volume as the largest non-bank SBA lender and the third largest SBA lender, including banks, at SBA’s fiscal year end of September 30, 2021. This 2021-1 Securitization has attractive economics for the Company, with the unguaranteed portions of the SBA 7(a) loans having been funded with 100% equity prior to the securitization, raising approximately $100.3 million of total cash liquidity, which includes $76.9 million of cash at closing, and a prefunding amount of $23.3 million, which we expect to draw down within 90 days, and with an advance rate of 82.50% across the A rated and BBB- rated Notes. The proceeds from this 2021-1 Securitization, which is classified as non-recourse financing, can be used to refinance higher-cost debt, fund loan originations, as well as o...