Oportun Completes $223 Million Asset Backed Securitization

Rhea-AI Summary

Oportun (Nasdaq: OPRT), a mission-driven fintech, has successfully completed a $223.25 million asset-backed securitization. The offering included four classes of fixed rate notes secured by a pool of unsecured and secured installment loans. KBRA rated the notes AA-, A-, BBB-, and BB- for Class A, B, C, and D respectively. The weighted average coupon on the transaction was 8.07%, with individual class coupons ranging from 5.83% to 10.47%.

Jefferies acted as the sole structuring agent and bookrunner, while Deutsche Bank Securities, J.P. Morgan Securities, Goldman Sachs, and Morgan Stanley served as co-managers. This securitization brings Oportun's total raised funds to over $1.8 billion in diversified financings since June of the previous year, demonstrating strong investor confidence in the company's consumer loans and business model.

Positive

• Successful completion of a $223.25 million asset-backed securitization
• Strong investor demand and favorable pricing reflecting confidence in Oportun's credit quality
• Over $1.8 billion raised in diversified financings since June of the previous year
• KBRA assigned investment-grade ratings to three out of four note classes

Negative

• None.

Insights

Financial Analyst

Oportun's successful $223.25 million asset-backed securitization demonstrates strong investor confidence in the company's loan portfolio and business model. The weighted average coupon of 8.07% is competitive in the current market environment, indicating favorable pricing for Oportun. The AA- rating for Class A notes from KBRA suggests a high level of creditworthiness, which could potentially lower borrowing costs for the company.

Notably, Oportun has raised over $1.8 billion in diversified financings since June 2023, showcasing its ability to access capital markets effectively. This financial flexibility is important for a fintech company, enabling it to fund growth and maintain liquidity. However, investors should monitor how efficiently Oportun deploys this capital and its impact on future profitability and loan performance.

Market Research Analyst

The successful completion of this securitization amid challenging market conditions signals positive sentiment towards Oportun's credit quality and risk management. The involvement of major financial institutions like Jefferies, Deutsche Bank, J.P. Morgan, Goldman Sachs and Morgan Stanley as structuring agents and co-managers adds credibility to the offering.

The diverse financing sources, including whole loan sales, securitizations and warehouse agreements, indicate a robust funding strategy. This diversification can help Oportun mitigate risks associated with reliance on a single funding source. However, it's important to analyze how these various funding mechanisms impact the company's overall cost of capital and its ability to maintain competitive loan pricing in the consumer finance market.

SAN CARLOS, Calif., Aug. 29, 2024 (GLOBE NEWSWIRE) -- Oportun (Nasdaq: OPRT), a mission-driven fintech, today announced the issuance of $223.25 million of fixed rate asset-backed notes secured by a pool of unsecured and secured installment loans.

The offering included four classes of fixed rate notes: Class A, Class B, Class C, and Class D. KBRA rated all classes of notes, assigning ratings of AA-, A-, BBB-, and BB-, respectively. Jefferies served as the sole structuring agent and sole bookrunner while Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, and Morgan Stanley & Co. LLC served as co-managers.

The weighted average coupon on the transaction was 8.07%. The Class A notes were priced with a coupon of 5.86% per annum; the Class B notes were priced with a coupon of 5.83% per annum; the Class C notes were priced with a coupon of 6.61% per annum; and the Class D notes were priced with a coupon of 10.47% per annum.

“The significant demand for and pricing of this securitization once again reflects investor confidence in the credit quality of Oportun’s consumer loans and our business model,” said Jonathan Coblentz, Chief Financial Officer at Oportun. “Since June of last year and inclusive of this transaction, Oportun has raised over $1.8 billion in diversified financings, including whole loan sales, securitizations and warehouse agreements from fixed income investors and banks.”

For more information visit oportun.com. The notes were offered pursuant to Rule 144A under the Securities Act of 1933, as amended.

This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

About Oportun
Oportun (Nasdaq: OPRT) is a mission-driven fintech that puts its members' financial goals within reach. With intelligent borrowing, savings, and budgeting capabilities, Oportun empowers members with the confidence to build a better financial future. Since inception, Oportun has provided more than $18.7 billion in responsible and affordable credit, saved its members more than $2.4 billion in interest and fees, and helped its members save an average of more than $1,800 annually. For more information, visit Oportun.com.

FAQ

What was the total value of Oportun's (OPRT) recent asset-backed securitization?

Oportun (OPRT) completed a $223.25 million asset-backed securitization.

What was the weighted average coupon on Oportun's (OPRT) August 2024 securitization transaction?

The weighted average coupon on Oportun's (OPRT) securitization transaction was 8.07%.

How much has Oportun (OPRT) raised in diversified financings since June of the previous year?

Oportun (OPRT) has raised over $1.8 billion in diversified financings since June of the previous year, including this securitization.

What ratings did KBRA assign to Oportun's (OPRT) asset-backed notes in August 2024?

KBRA assigned ratings of AA-, A-, BBB-, and BB- to Oportun's (OPRT) Class A, B, C, and D notes, respectively.