Hana Small Business Lending is preparing a $33 million securitization, according to a presale report published by Standard & Poor’s.
Guggenheim Securities is the underwriter.
The collateral consists of uninsured portion of 151 loans made under the Small Business Administration’s 7(a) program. These loans, all of which were made by Hana, were used to refinance existing debt, acquire or improve property, acquire equipment, or for working capital.
The deal, Hana Small Business Lending Loan Trust 2014-1, will issue a single tranche of notes that benefit from “hard” credit enhancement of 26%. S&P has assigned a preliminary A’ rating to the notes, which are being marketed at an interest rate that is the lesser of the prime rate plus 120 basis points and one-month LIBOR plus 350 basis points.
Hana lends to small businesses in several large cities across the U.S., including Los Angeles, Atlanta, Chicago, New York, and Seattle, among others. As of Jan. 31, 2014, the seller had originated approximately 91% of the portfolio's collateral, according to the presale report. The issuer has the option to purchase additional assets up to $4.07 million in par amount until September 2014
Hana was last in the securitization market in 2012 with a $26.6 million deal, according to S&P. However, another non-bank SBA lender, Newtek Business Services, came to market in March of 2013 and did an add-on offering in December for a total of over $46 million. The securities were also rated A’ by S&P and were offered at the lesser of the prime rate plus 145 basis points or one-month Libor plus 375 basis points.