Channel completed its first securitization, a $105 million issuance of asset-backed notes collateralized by small business loans and advances across a range of industries.
The notes consist of three classes, rated A (sf), BBB (sf) and BB (sf) by Kroll Bond Rating Agency with a blended fixed annual coupon of 3.8%. The transaction also features a three-year revolving period and may be increased to $500 million. Guggenheim Securities served as sole structuring advisor and book-running manager for the securitization.
“We are excited to have successfully executed on our first securitization, which represents an important milestone for our team and platform,” Eli Sethre, CFO of Channel, said. “KBRA’s ratings and Channel’s track record of historically low cumulative net loss rates across economic environments demonstrate the value of our business model and ability to underwrite and manage risk. This ABS financing structure significantly improves Channel’s cost of capital, liquidity and financing diversity, all of which are crucial to our growth and continued success.”
“We are pleased with the acceptance of Channel’s first offering in the marketplace by institutional investors,” Brad Peterson, president and CEO of Channel said. “The interest shown is a significant reflection of our strong partnerships and the quality of business we originate together. Moreover, it substantiates the direction we are headed as a company; the value in our credit modeling, business analytics and technology enabled approach; and the single source benefit we uniquely bring to market through multiple products and solutions.”
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