CNL Commercial Finance is prepping its next small business loan securitization, which should price this week, via Wachovia Securities.

This will be CNL's second deal off this platform, which it acquired last September from the Bank of Yorba Linda (BYL). BYL had done two previous small business securitizations.

The $135 million sen/sub deal is structured as two floating-rate classes, a 7.3-year triple-A-rated A-class talked at 65 to 70 basis points over the one-month Libor, and a 7.3-year single-A-rated B-class talked at one-month Libor plus 175 area, according to published reports. All three agencies are rating the deal.

CNL Commercial Finance last came to market in June. That two-part transaction priced at 64 basis points over the one-month Libor on the triple-A-rated A-class, and 250 over the one-month Libor on the split-rated Baa1/A-' B-class. Both tranches priced within guidance. Moody's Investors Service and Fitch rated the transaction.

CNL Commercial Finance is a subsidiary of the CNL Group, which is also parent company of CNL Funding, a CMBS/franchise loan-backed issuer. The two CNL's operate independent of each other.

Business loan update

Gladstone Capital Corp., which in August completed its initial public offering, said in a quarterly filing with the Securities & Exchange Commission that it will begin securitizing mezzanine business loans in approximately 12 months to 18 months.

As of it last week, the company reported $72 million worth of non-binding loan commitments in the works. Through its IPO, the company raised approximately $115 million in equity capital.

Only one company to date has brought these mezzanine business loans to term, American Capital Access, via underwriter First Union Securities (now Wachovia). Other mezzanine lenders are said to be looking at the securitization market, and one industry pro predicted the ABS market could see as many five regular issuers by the end of next year.

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