Online small-business lender Kabbage is adding $200 million in additional notes for its outstanding $700 million Series 2019-1 revolving securitization that was originally issued in March.
According to a presale report from Kroll Bond Rating Agency, the additional notes will carry the same ratings and terms on the five counterpart classes of outstanding notes.
The largest tranche is the $138.1 million in additional Class A notes that will carry a 3.825% coupon with a preliminary AA rating from Kroll, and will bulk up the AA-rated Class A tranche of $483.4 million in notes already in circulation. The additional notes will also benefit from 34.88% credit enhancement applied to the earlier tranche.
The $900 million in total Series 2019-1 notes are secured by installment loans for small and medium-sized businesses underwritten and serviced on Kabbage’s platform.
Atlanta-based Kabbage offers business lines of credit up to $250,000 for six-, 12- or 18-month installment loans; it also provides working capital through cash advances on future receivables for the businesses.
The loans are repaid in equal principal payments over the original terms of the loan, along with fees based on the initial borrowings. The average receivables balance is $11,857, on original terms of 9.9 months, according to Kroll. The pool of receivables has remaining average terms of six months.
As of Jan. 31, the pool of receivables securing the first notes issuance totaled $664.5 million.
