Newtek Business Services Corp. (“Newtek”) (Nasdaq: NEWT), an
internally managed business development company (“BDC”), today
announced that it has priced its tenth and largest small business
loan securitization, with the offering of $118,920,000 of
Unguaranteed SBA 7(a) Loan-Backed Notes, Series 2019-1, consisting
of $93,540,000 of Class A Notes and $25,380,000 Class B Notes
(collectively, the “Notes”), rated “A” and “BBB-”, respectively, by
S&P Global Ratings, (“S&P”). The Company anticipates
this transaction will close on October 4, 2019. The Notes had
an approximate 83% advance rate, and were priced at an average
initial yield of approximately 3.84% (Note Interest Rates will be
floating rate), which is equivalent to a spread of 183 basis points
over LIBOR, across both classes.
The Notes are collateralized by the right to
receive payments and other recoveries attributable to the
unguaranteed portions of SBA 7(a) loans made by Newtek Small
Business Finance, LLC ("NSBF") pursuant to Section 7(a) of the
Small Business Act, and overcollateralized by NSBF's participation
interest in the unguaranteed portions. Deutsche Bank
Securities Inc. acted as sole book-running manager and Capital One
Securities, Inc. acted as co-manager for the sale of the Notes.
Barry Sloane, Chairman, President and Chief Executive Officer of
Newtek Business Services Corp. said, “We are extremely pleased to
announce our 10th and largest securitization, on which we received
the best pricing of any prior NSBF securitization. We received
approximately $451 million in aggregate orders across both classes
of Notes, and we issued over $118 million in investment grade Notes
to 12 investors across both classes. We believe that these
attractive economics and demand for our securitized classes are
evidence of our continued ability to lower our cost of
capital and is indicative of the performance of our prior
secutiziations. In fact, all of our prior nine
securitizations have either maintained their ratings or been
upgraded by S&P, which we believe is a product of our
securitization transactions turbo principal payment structure and
the loan portfolios’ stable performance. Additionally, in
July 2019, Newtek closed a public offering of $55.0 million in
aggregate principal amount of 5.75% Notes Due 2024, and used a
portion of the net proceeds of that offering to redeem our 7.50%
notes due 2022. We also recently reported that we increased our
Capital One revolving credit facility from $100 million to $150
million, and last year we received a 50 basis point reduction on
this facility thereby reducing the interest expense associated with
this facility.”
Mr. Sloane continued, “We believe that the core strength of our
Company is our diverse business model, which seeks to generate
multiple streams of reoccurring revenue and earnings. The
Company is revising its 2019 SBA 7(a) loan funding guidance to $520
million. This repositioned forecast is due to changes in, among
other things, the economy, company personnel and loan
processing. We have factored these changes into our
reconfirmed business forecast. We will further discuss these
changes and the growth forecasts for our SBA 7(a) loan business and
other businesses during our third quarter 2019 earnings conference
call in early November. We believe that Newtek Conventional
Lending, LLC, our non-conforming conventional loan joint venture,
will contribute to our 2019 and 2020 earnings.”
Mr. Sloane concluded, “We are reconfirming our 2019 annual
dividend guidance of $2.151 per share, which would represent an
approximate 20% increase over our annual dividend payment of $1.80
per share in 2018, and are presently forecasting a $0.71 per share
dividend for the fourth quarter 2019. We expect to declare
the fourth quarter 2019 dividend in the coming weeks. In
addition, during our third quarter 2019 earnings conference call,
we expect to issue our annual dividend guidance for 2020, which we
believe will be consistent with past forecasts of year-over-year
dividend growth. We expect to maintain our dividend policy of
distributing an amount that approximates 90 - 100% of the Company's
annual taxable income.”
1Amount and timing of dividends, if any, remain
subject to the discretion of the Company’s Board of Directors.
About Newtek Business Services Corp.Newtek
Business Services Corp., Your Business Solutions Company®, is an
internally managed BDC, which along with its controlled portfolio
companies, provides a wide range of business and financial
solutions under the Newtek® brand to the small- and medium-sized
business (“SMB”) market. Since 1999, Newtek has provided
state-of-the-art, cost-efficient products and services and
efficient business strategies to SMB relationships across all 50
states to help them grow their sales, control their expenses and
reduce their risk.
Newtek’s and its portfolio companies’ products and services
include: Business Lending, SBA Lending Solutions, Electronic
Payment Processing, Technology Solutions (Cloud Computing,
Data Backup, Storage and Retrieval, IT Consulting), eCommerce,
Accounts Receivable Financing & Inventory Financing,
Insurance Solutions, Web Services, and Payroll and Benefits
Solutions.Newtek® and Your Business Solutions Company®, are
registered trademarks of Newtek Business Services Corp.
Note Regarding Forward Looking
StatementsThis press release contains certain
forward-looking statements. Words such as “believes,” “intends,”
“expects,” “projects,” “anticipates,” “forecasts,” “goal” and
“future” or similar expressions are intended to identify
forward-looking statements. All forward-looking statements involve
a number of risks and uncertainties that could cause actual results
to differ materially from the plans, intentions and expectations
reflected in or suggested by the forward-looking statements. Such
risks and uncertainties include, among others, intensified
competition, operating problems and their impact on revenues and
profit margins, anticipated future business strategies and
financial performance, anticipated future number of customers,
business prospects, legislative developments and similar matters.
Risk factors, cautionary statements and other conditions, which
could cause Newtek’s actual results to differ from management’s
current expectations, are contained in Newtek’s filings with the
Securities and Exchange Commission and available through
http://www.sec.gov/. Newtek cautions you that forward-looking
statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected
or implied in these statements.
SOURCE: Newtek Business Services Corp.
Investor Relations & Public
RelationsContact: Jayne Cavuoto Telephone: (212) 273-8179
/ jcavuoto@newtekone.com
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