Newtek Business Services announced today that we have sold $20.909 million single A-rated securities through Guggenheim Securitiesas the placement agent. The collateral consisted of 113 loans with an aggregate principal balance of $23.569 million. These loans were made by Newtek to small- and medium-sized businesses and were used to refinance debt, acquire real estate, and purchase business, machinery, and equipment. The securitization funded and closed on March 20, 2013. Guggenheim Securities placed the issue with four institutional investors.
Barry Sloane, Chairman, President and Chief Executive Officer of Newtek Business Services said, “This securitization will fully repay our outstanding senior secured warehouse line with Capital One N.A. The Company has elected to securitize the uninsured portions of its SBA 7(a) loan originations due to attractive features of long -term matched asset liability financing. It also provides an additional 15 percent fund for additional originations at a lower cost of interest than our warehouse facility. As compared to our prior securitizations in 2010 and 2011, this current securitization was rated single-A by Standard and Poors and we were able to improve our advance rate by 8-9%, as well as improve our long-term cost of interest by more than 150 basis points.
For 2013, we continue to expect to originate and close between $150-$200 million of SBA 7(a) loans through our small business lending subsidiary Newtek Small Business Finance.”
Mr. Sloane concluded, “We want to thank Guggenheim Securities for placing our bonds with multiple institutional investors beyond those that participated in our prior securitization transactions. We look forward to continuing to use our existing financing sources and asset securitizations to grow our small business lending segment’s profitability.”