NewtekOne is aiming to sell $294 million in asset-backed securities (ABS) to investors, to fund a pool of loans extended to independent and small- to medium-sized businesses.
NALP Business Loan Trust, series 2026-1, will issue the notes through three tranches of classes A, B and C, according to Morningstar DBRS, and they have a maturity date of June 26, 2051.
The deal has a prefunding period that begins on the January closing date, and ends either 90 days later, the occurrence of a trigger event, or the occurrence and continuance of an unwaivered indenture default, whichever is earlier, DBRS said.
Newtek Business Services Holdco 6 offers 10- to 25-year amortizing loans with no balloons, and either limited or no covenants, and the company will also service them, DBRS said.
They are also like SBA 7(a) loans, DBRS said, in that they require personal guarantees from every 20% equity owner or greater, and liens business and personal assets.
Primarily, though, the similarity to the SBA 7(a) program is based on being able to provide a long-term amortization that reduces monthly payments and allows greater flexibility in loan terms to borrowers.
Hard credit enhancement to the notes includes overcollateralization, to account for 13.8% of the collateral loan balance at closing, DBRS said. The deal will also benefit rom subordination, and a cash reserve account equaling 2.00% of the initial pool balance.
NALP 2026-1 includes several other liquidity measures to boost liquidity. They include a capitalized interest account, into which the depositor, NALP Asset Backed Securities, will place $799,125 on the deal's closing date, DBRS said. Any funds left in the account will be returned to the depositor after the prefunding period ends.
DBRS assigns ratings of (P) A (low) (sf); (P) BBB (sf) and (P) BB (sf).
