Newtek Business Services sold an additional $24.4 million of single-A rated securities backed by the non-guaranteed portions of its small-business loans from its small business loans trust.
In a press release issued today, Newtek said the securitization is an addition to its March $20.9 million securitization deal, which was underwritten by Guggenheim Securitiesand placed with four institutional investors. The securitization trust has completed approximately $63.8 million of non-guaranteed portions of small-business loans within the past 12 months.
Standard & Poor’s rated this securitization's trust notes as 'A' based on the collateral in the entire, upsized pool. The collateral consists of the uninsured portion of loans made under the Small Business Administration’s 7(a) program. These loans, all of which were made by Newtek, were used to refinance debt, acquire real estate, and purchase business, machinery and equipment.
"This is the first time in the company's history that we financed the uninsured portions of our SBA 7(a) government-guaranteed loans in two separate transactions within the same calendar year, said Barry Sloane, president and chief executive officer of Newtek.
Sloane said the securitization increases Newtek’s access to capital and its capability to continue to fund more loans for U.S. small businesses.
Newtek expects to increase loan origination volume to a range of $230 million to $270 million in 2014 and, as a result, may either issue larger securitizations or come to the market more frequently.