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Sezzle Inc. announces a new $150 million receivables funding facility with Bastion Management II , lowering interest costs and upsizing availability. The facility will have an interest rate of SOFR plus 6.75%, compared to the previous facility's rate of SOFR plus 11.50%, providing resources for growth in the US and Canadian markets.
Sezzle Inc. annuncia un nuovo impianto di finanziamento per crediti di 150 milioni di dollari con Bastion Management II, riducendo i costi degli interessi e aumentando la disponibilità. L'impianto avrà un tasso di interesse del SOFR più il 6,75%, rispetto al tasso del precedente impianto del SOFR più l'11,50%, fornendo risorse per la crescita nei mercati statunitensi e canadesi.
Sezzle Inc. anuncia una nueva facilidad de financiación de cuentas por cobrar de 150 millones de dólares con Bastion Management II, reduciendo los costos de interés y aumentando la disponibilidad. La facilidad tendrá una tasa de interés de SOFR más 6.75%, en comparación con la tasa anterior de la facilidad de SOFR más 11.50%, proporcionando recursos para el crecimiento en los mercados de EE. UU. y Canadá.
Sezzle Inc.는 Bastion Management II와 1억 5천만 달러의 새로운 매출채권 자금 조달 시설을 발표하여 이자 비용을 낮추고 사용 가능성을 확대합니다. 이 시설은 이전 시설의 SOFR + 11.50% 비율에 비해 SOFR + 6.75%의 이자율을 가질 것이며, 미국 및 캐나다 시장에서의 성장을 위한 자원을 제공할 것입니다.
Sezzle Inc. annonce une nouvelle facilité de financement de créances de 150 millions de dollars avec Bastion Management II, réduisant les coûts d'intérêt et augmentant la disponibilité. L'installation aura un taux d'intérêt de SOFR plus 6,75%, par rapport au taux de l'installation précédente de SOFR plus 11,50%, fournissant des ressources pour la croissance sur les marchés américain et canadien.
Sezzle Inc. kündigt eine neue Forderungsfinanzierungsfazilität in Höhe von 150 Millionen Dollar mit Bastion Management II an, die die Zinskosten senkt und die Verfügbarkeit erweitert. Die Einrichtung wird einen Zinssatz von SOFR plus 6,75% haben, verglichen mit dem vorherigen Zinssatz der Einrichtung von SOFR plus 11,50%, was Ressourcen für das Wachstum auf den US-amerikanischen und kanadischen Märkten bereitstellt.
Positive
Sezzle secures a new $150 million receivables funding facility with Bastion Management II
The new facility lowers the Company's borrowing costs significantly, with an interest rate of SOFR plus 6.75% compared to the previous facility's rate of SOFR plus 11.50%.
The funding will support Sezzle's growth in the US and Canadian markets, allowing for the scaling of operations and pursuit of new strategic initiatives.
Negative
None.
Insights
Sezzle Inc.'s announcement of a new $150 million receivables funding facility, which not only increases their borrowing capacity by 50% but also slashes their interest rates significantly, is a strategic financial maneuver. By transitioning from a 11.50% to a 6.75% interest over SOFR, the company is poised to save on interest expenses, which can have a direct positive effect on net income and, consequently, earnings per share (EPS). For a retail investor, this could signal an improving financial position and possibly lead to favorable stock price movement. However, the assumption that reduced interest expenses will automatically translate to improved earnings would be simplistic. It is essential to monitor how these added funds will be deployed towards growth initiatives and whether such investments will yield a return that outweighs the costs.
The additional capital through the upsized funding facility for Sezzle could indicate a poised aggressiveness for market expansion, particularly within the United States and Canada. With the fintech landscape being highly competitive, the capability to scale operations and invest in strategic initiatives is crucial. This positions Sezzle to potentially capture a larger market share, which is key for long-term sustainability and growth. Investors should consider how Sezzle's strategic initiatives align with consumer trends and demand for digital payment solutions. The company's success in leveraging this facility to secure competitive advantages will be a determining factor in their market position and growth trajectory.
Minneapolis, MN, April 22, 2024 (GLOBE NEWSWIRE) -- Sezzle Inc. (NASDAQ:SEZL) (Sezzle or Company) // Purpose-driven digital payment platform, is pleased to announce its new $150 million receivables funding facility secured with an affiliate of Bastion Management II LLC (Bastion). Bastion will act as the Administrative Agent for the lenders. The new facility supersedes the previous $100 million facility established in October 2022 with Bastion and affiliates.
In addition to increasing the size of the facility, the new facility will significantly lower the Company’s borrowing costs. The new facility will have an interest rate of SOFR (Secured Overnight Financing Rate) plus 6.75% compared to the previous facility’s rate of SOFR plus 11.50%. The additional funding will bolster the Company’s ongoing growth in the United States and Canadian markets, providing the necessary resources to scale operations and pursue new strategic initiatives.
"We're thrilled to extend our lending partnership with Bastion, a key growth partner of ours for many years,” stated Karen Hartje, Sezzle’s Chief Financial Officer. “This larger and lower-cost facility will significantly enhance our ability to fund the growth of new strategic initiatives and sustain our profitable growth trajectory. We are excited and optimistic about the potential this extended partnership holds for Sezzle’s future.”
Key Terms of the Facility
Size: $150 million plus $75 million accordion
Term: 3 years
Interest Rate: 3-month Term Secured Overnight Financing Rate (SOFR) + 6.75% with a SOFR floor of 2.0%
Advance Rate: 85% - 90% of eligible originations, dependent upon receivable performance
Unused Additional Interest: 0.5% of unused funds, paid annually
Minimum Utilization: $60 million throughout the life of the facility; previous facility minimum utilization was $80 million
Other: Covenants, representations & warranties, and reporting obligations typical of a similar receivables warehouse facility
Contact Information
Lee Brading, CFA Investor Relations +1 651 240 6001 InvestorRelations@sezzle.com
Erin Foran Media Enquiries +1 651 403 2184 erin.foran@sezzle.com
About Sezzle Inc.
Sezzle is a fintech company on a mission to financially empower the next generation. Sezzle’s payment platform increases the purchasing power for millions of consumers by offering interest-free installment plans at online and in-store locations. Sezzle’s transparent, inclusive, and seamless payment option allows consumers to take control over their spending, be more responsible, and gain access to financial freedom.
What is the new funding facility amount secured by Sezzle Inc. with Bastion Management II ?
Sezzle Inc. has secured a new $150 million receivables funding facility with Bastion Management II
How does the new facility impact Sezzle's borrowing costs?
The new facility significantly lowers Sezzle's borrowing costs, with an interest rate of SOFR plus 6.75% compared to the previous facility's rate of SOFR plus 11.50%.
What markets will the additional funding support Sezzle's growth in?
The additional funding will support Sezzle's growth in the United States and Canadian markets.
Who will act as the Administrative Agent for the lenders in the new facility?
Bastion Management II will act as the Administrative Agent for the lenders in the new facility.
What does Karen Hartje, Sezzle's Chief Financial Officer, say about the new facility?
Karen Hartje stated that the larger and lower-cost facility will enhance Sezzle's ability to fund new strategic initiatives and sustain profitable growth.
