Newtek Business Services is preparing a $20.9 million securitization of small business loans, according to a presale report from Standard & Poor's.
Guggenheim Securities is the underwriter.
The deal, Newtek Small Business Loan Trust, consists of a single tranche with a preliminary ‘A’ rating from S&P. It is being offered at the lesser of the Prime rate plus 145 bps or one-month Libor plus 375 basis points.
It is backed by $23.6 million of the unguaranteed portion of loans made under the U.S. Small Business Administration’s 7(a) program. There are a total of 113 loans with a weighted average remaining term to maturity of 197 months. Approximately 41% of the loans are to refinance debt, 15% fund the purchase of real estate, 14% fund the purchase of businesses, and 13% fund the purchase of machinery and equipment.
As of Jan. 31, 2013, the issuer had purchased approximately 80% of the portfolio's collateral and identified almost all of the remaining collateral.
The deal is expected to close March 8.
Newtek was last in the market in December 2011, when it issued $20.5 million of securities. That deal was an amendment to $16 million deal issued in 2010. Through a supple indenture, Newtek added new loans to the pool, increasing the overall size to $35.471 million, withdrew some delinquent loans from the pool, and funded a reserve account.