Business Loan Express priced a $102 million offering backed by the non-government guaranteed portions of Small Business Association loans - dubbed SBA 7a loans - with WestLB making its debut as lead manager on a BLX transaction. Previously, Wachovia Securities had acted as lead, with WestLB filling the co-manager role.
The six-year triple-A rated notes cleared at 30 basis points over one-month Libor and the single-A rated class of the same duration hit at 80 points over Libor. Roughly $2 million in subordinate notes were retained by BLX. The offering was oversubscribed by multiples of issuance, said a banker at WestLB.
The issuer typically comes to market on a twice yearly basis, and is expected to bring a deal backed by conventional small business loans sometime this summer, said a source at BLX. WestLB is not currently slated to lead that transaction.
"We don't have a conventional [small business loan] warehouse in place with BLX," said the WestLB banker.
BLX does, however, have an SBA 7 warehouse facility with WestLB which was paid down with last week's transaction.
BLX makes long term loans for business and commercial purposes ranging from real estate acquisition and refinance to business acquisition and working capital. BLX has provided over $2 billion in financing to companies in over 350 industries. Their loan programs are designed for borrowers with financing needs from $200,000 to $4 million.
The average SBA loan for BLX is roughly $700,000, according to a BLX official. The government may guarantee up to 75% of that loan, leaving about $175,000 for securitization purposes. One transaction might include as many as 900 loans. Transactions backed by conventional loans are generally not as diverse since the individual loans are considerably larger, the official said.
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