Following its strong SME lending performance, Prospa has announced the pricing of its first public asset-backed securitisation (ABS) issuance.
Backed up by small business loans and credit facilities, PROSPArous Trust 2021-1 has $200 million issued to local and international investors. The transaction was oversubscribed, leading to a competitive day-one weighted average margin of 234bps above one-month bank bill swap rate.
Demand was high for the ABS to the point where Prospa had to scale back to achieve the $200 million maximum issuance.
“We are pleased with the strong demand and pricing of this transaction, which aims to establish an efficient funding structure to enable growth. Our achievement is evidence of the company’s ongoing performance and robust portfolio that underpins our ambitions to scale existing products, create new innovative solutions and accelerate growth,” said Ross Aucutt, chief financial officer of Prospa.
This comes after the non-bank lender received a good portfolio performance in its SME lending sector for the first two months of FY22. The strong origination of $41.8 million in July shot up by 105% on personal contract purchase to $44.9 million in August.
In comparison, only $21.9 million was collected the same time last year.
This success has allowed Prospa to continue its short-term assistance to customers experiencing temporary business interruptions.
In particular, 2.5% of customer accounts are on up to six weeks of partial payment arrangements and 1.3% of customer accounts are on up to four weeks payment deferral as of Sept. 6. These percentages have remained stable over the past month.
“We are grateful for the diverse support we received from local and offshore investors in our inaugural ABS transaction, and we look forward to becoming a regular issuer in the future,” Aucutt said.