Global financial service platform Kabbage announced on Monday it has closed a $700 million securitization. The company claimed it was the largest asset-back securitization (ABS) by a small business online lending platform to date.
According to Kabbage, the oversubscribed transaction saw strong demand from both new and existing institutional investors, further demonstrating the market’s continued confidence in the strength of Kabbage’s platform. Kabbage also reported that to date, it has helped more than 170,000 small businesses access over $6.5 billion in funding via its automated underwriting models which analyzes the live business data of customers to provide a funding decision in minutes. Kabbage explained:
“The most senior class of the five-tranche transaction earned a AA(sf) rating from Kroll Bond Rating Agency, representing the highest ABS rating earned by a small business online lending platform for a three-year facility. The transaction also reduces the company’s cost of funds compared to its existing ABS by more than 100 basis points.”
“The new ABS and AA(sf) rating is a testament to Kabbage’s proven and real-time approach to responsibly provide credit access to small businesses. The new transaction positions the company for continued milestone growth as small businesses accessed more than $2 billion through Kabbage last year and more than $600 million already in the first quarter of 2019.”
Kabbage went on to add that the securitization brings its current debt funding to $940 million, including other existing bilateral credit facilities. The transaction is issued by Kabbage Asset Securitization LLC, a wholly-owned subsidiary of Kabbage, Inc., and a majority of its proceeds were used to pay down an existing asset-backed securitization transaction.