Small business lender Kabbage prices second securitisation, Guggenheim plays key role.
Kabbage, the globally active, lending-as-a-service (LaaS) technology provider and lending platform, has priced a $525m securitisation – a facility which is expandable to $1.5bn. It’s the firm’s second securitisation to date, as well as the largest securitisation of small business loans by an online lender, according to Kabbage.
The deal is expected to clinch an “A(sf)” rating from Kroll Bond Rating Agency (KBRA). It is expected to close on 20 March 2017.
Guggenheim Securities, the investment banking and capital markets arm of Guggenheim Partners, is acting as sole structuring advisor and initial purchaser of the notes. Kabbage says that the deal was “significantly oversubscribed” by “top-tier” institutional investors.
Kabbage first securitised its loans in March 2014, in a transaction worth $270m, later expanding to $545m. The latest deal has secured a higher rating from Kroll. Anthony Nocera, managing director at the ratings agency, said that this was based on “several structural improvements and the existence of more historical performance data relating to Kabbage’s collateral”.
Kevin Phillips, head of corporate development at Kabbage, said both the anticipated rating and the strong interest garnered from investors by the deal are testaments to the firm’s “proven approach to underwriting and managing small business loan performance”.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.