Oportun Financial Secures $200 Million Through Asset-Backed Notes Issuance
SAN CARLOS, Calif. – In a significant financial maneuver, Oportun Financial Corporation (NASDAQ:OPRT), a pioneering entity in the fintech arena, has successfully executed an issuance valued at $200 million in fixed-rate asset-backed notes. This strategic move underscores the robust confidence investors place in the credit quality of Oportun's consumer loan offerings and its innovative business model.
The note issuance, which comprises a mix of unsecured and secured installment loans, is segmented into four distinct classes: Class A, Class B, Class C, and Class D. In an affirmation of the inherent quality and appeal of these financial instruments, the Kroll Bond Rating Agency (KBRA) has assigned ratings to each note class, with ratings spanning from AA- for Class A to BB- for Class D.
A consortium of four initial purchasers, including powerhouse financial institutions Morgan Stanley, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and Jefferies, has acquired these notes. Morgan Stanley has further distinguished itself by serving as the sole structuring agent and bookrunner, with the remaining firms acting as co-managers for the issuance.
Highlighting the economic viability and attractiveness of the offering, the transaction boasts a weighted average coupon rate of 8.434%. The tiered coupon rates range from a low of 6.334% per annum for Class A notes to a high of 12.072% for Class D notes. This structured approach to coupon rates ensures a broad appeal to diverse investor appetites for risk and return.
Jonathan Coblentz, Chief Financial Officer at Oportun, noted the significant market demand and favorable pricing conditions that accompanied this securitization. According to Coblentz, these factors serve as a testament to the burgeoning investor recognition of the quality underpinning Oportun's consumer loans and the company’s overarching business strategy.
Strategically, the proceeds from this note issuance are earmarked to propel Oportun's profitability in the prevailing market environment, while furthering its mission to empower its members towards achieving markedly improved financial futures. Currently, Oportun boasts a membership base exceeding 2.1 million individuals, having extended over $17.2 billion in credit since its inception. In doing so, Oportun purports to have effected more than $2.4 billion in savings for its members, across interest and fees.
This issuance not only augurs well for Oportun’s strategic financial positioning but also reflects a broader positive sentiment within the investment community regarding the fintech sector's capabilities and future prospects.
For detailed insights into the burgeoning fintech landscape and more investment opportunities, stay tuned to our latest articles and analyses.
Analyst comment
This news can be evaluated as positive. Oportun Financial’s successful issuance of $200 million in asset-backed notes demonstrates investor confidence in the credit quality of their consumer loans and business model. The tiered coupon rates and acquisition by major financial institutions further support the attractiveness of the offering. As a result, this move is expected to improve Oportun’s profitability and further their mission, while also reflecting positive sentiment towards the fintech sector.
