BOCA RATON, Fla., Aug. 23, 2022 (GLOBE NEWSWIRE) — Newtek Business Services Corp., (NASDAQ: NEWT), an internally managed business development company (“BDC”), today announced that it has priced its twelfth small business loan securitization, with the offering of $116,210,000 of unsecured SBA 7(a) loan-backed notes, series 2022-1, consisting of $95,380,000 of Class A notes and $20,830,000 of Class B Notes (collectively, the “Notes”), with preliminary ratings of “A- (sf)” and “BBB- (sf)”, respectively, by S&P Global Ratings (“S&P”) . The tickets have an expected advance rate of 79.5%. Class A notes were priced at 280 basis points on the 30-day compound average SOFR, and Class B notes were priced at 375 basis points on the 30-day compound average SOFR (interest rates notes are variable rate and adjust monthly).
The Notes are secured by the right to receive payments and other recoveries attributable to the unsecured portions of the SBA 7(a) loans made by Newtek Small Business Finance, LLC (“NSBF”) pursuant to Section 7(a) of the Small Business Act. , and over-secured by NSBF’s participation in the unsecured portions. Deutsche Bank Securities and Capital One Securities acted as co-book managers for the transaction.
Barry Sloane, Chairman and Chief Executive Officer of Newtek Business Services Corp., said, “We couldn’t be happier with the reception Newtek has received for its thirteenth rated securitization and twelfth rated structured bond issuance by S&P Global Ratings. . This securitization received strong investor demand from 13 institutional investors, including global fund managers, sovereign wealth funds and asset managers that have $1 trillion under management, and was oversubscribed in just 48 hours of marketing. We would like to thank Deutsche Bank and Capital One Securities, who were joint accountants on this transaction, which is expected to close on or around September 7, 2022.”
Mr. Sloane continued, “Upon closing of the securitization, we expect to refinance the NSBF warehouse line and monetize the equity-backed loans to create approximately $29 million of new cash flow, not including the securitization pre-financing account. Our SBA 7(a) loans are all floating rate issued at prime plus 275 basis points and adjusted quarterly. We believe we are adequately funded in both rising and falling rate environments, albeit with some lag and lag in either interest rate scenario. We would like to thank the many bond investors who have successfully invested in our rated securities, which reinforces our position as the second largest SBA 7(a) lender by dollar loan approval volume, including banks, and the largest non-bank SBA 7(a) lender overall.
Newtek Business Services Corp., Your Business Solutions Company® , is an internally managed BDC which, together with its controlled holding companies, provides a wide range of business and financial solutions under the Newtek® brand to the small and medium-sized enterprise (“SME”) market. Since 1999, Newtek has provided leading, cost-effective products and services and effective business strategies to SMB relationships in all 50 states to help them increase sales, control expenses and reduce risk.
Products and services of Newtek and its portfolio companies include: business loans, SBA loan solutions, electronic payment processing, technology solutions (cloud computing, data backup, storage and recovery, IT consulting) , eCommerce, Accounts Receivable and Inventory Financing, Insurance Solutions, Web Services, and Payroll and Benefits Solutions.
Newtek® and Your Business Solutions Company® are registered trademarks of Newtek Business Services Corp.
Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements. Words such as “believes”, “intends”, “expects”, “plans”, “anticipates”, “plans”, “goal” and “future” or similar expressions are intended to identify forward-looking statements.All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected or implied by the forward-looking statements. These risks and uncertainties include, among others, increased competition, operational issues and their impact on revenues and profit margins, expected future business strategies and financial performance, expected future number of customers, trade, legislative developments and other similar matters. Risk factors, cautionary statements and other conditions, which could cause Newtek’s actual results to differ from management’s current expectations, are contained in Newtek’s filings with the Securities and Exchange Commission and available throughhttp://www.sec.gov/. Newtek cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied by such statements.
SOURCE: Newtek Business Services Corp.
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