SelectQuote Completes First Phase of Recapitalization with $100 Million Securitization
SelectQuote, Inc. (NYSE: SLQT) has completed a $100 million securitization transaction on October 15, 2024. This transaction provides advanced financing against expected collections for previously sold policies. The company's receivables totaled approximately $1 billion as of June 30, 2024, with only a portion securitized in this deal.
The proceeds will be used to pay down a portion of outstanding term debt. The new securitized debt offers a lower cost of capital than the current term debt. The transaction also includes a maturity extension for the remaining term debt from September 15, 2025 to September 30, 2027, with a potential further extension to September 30, 2028.
SelectQuote has hired an investment bank to conduct a strategic review of all available options to meet payment milestones, strengthen the balance sheet, and fund continued investment in core business lines.
SelectQuote, Inc. (NYSE: SLQT) ha completato una transazione di cartolarizzazione da 100 milioni di dollari il 15 ottobre 2024. Questa transazione offre finanziamenti anticipati contro incassi attesi per polizze già vendute. Nel complesso, i crediti dell'azienda ammontavano a circa 1 miliardo di dollari al 30 giugno 2024, con solo una parte cartolarizzata in questo accordo.
I proventi saranno utilizzati per dilazionare una parte del debito a lungo termine. Il nuovo debito cartolarizzato offre un costo del capitale inferiore rispetto al debito attuale. La transazione include anche un allungamento della scadenza per il debito residuo da 15 settembre 2025 a 30 settembre 2027, con una possibile ulteriore estensione fino al 30 settembre 2028.
SelectQuote ha assunto una banca d'investimento per condurre una revisione strategica di tutte le opzioni disponibili per rispettare le scadenze di pagamento, rafforzare il bilancio e finanziare investimenti continuativi nelle linee di business principali.
SelectQuote, Inc. (NYSE: SLQT) ha completado una transacción de titulización de 100 millones de dólares el 15 de octubre de 2024. Esta transacción proporciona financiamiento anticipado contra las colecciones esperadas de pólizas previamente vendidas. Las cuentas por cobrar de la empresa totalizaron aproximadamente 1.000 millones de dólares al 30 de junio de 2024, con solo una parte titulizada en este acuerdo.
Los ingresos se utilizarán para reducir una parte de la deuda a plazo pendiente. La nueva deuda titulizada ofrece un costo de capital más bajo que la deuda a plazo actual. La transacción también incluye una extensión de vencimiento para la deuda restante desde el 15 de septiembre de 2025 hasta el 30 de septiembre de 2027, con una posible extensión adicional hasta el 30 de septiembre de 2028.
SelectQuote ha contratado a un banco de inversión para llevar a cabo una revisión estratégica de todas las opciones disponibles para cumplir con los hitos de pago, fortalecer el balance y financiar inversiones continuas en las líneas de negocio principales.
SelectQuote, Inc. (NYSE: SLQT)는 2024년 10월 15일에 1억 달러 규모의 증권화 거래를 완료했습니다. 이 거래는 이전에 판매된 보험에 대한 예상 수금을 바탕으로 선행 금융을 제공합니다. 회사의 외상금은 2024년 6월 30일 기준으로 약 10억 달러로, 이번 거래에서는 일부만이 증권화 되었습니다.
수익은 미지급 장기 채무의 일부를 상환하는 데 사용될 것입니다. 새로 증권화된 채무는 현재 장기 채무보다 더 낮은 자본 비용을 제공합니다. 이 거래에는 잔여 장기 채무의 만기를 2025년 9월 15일부터 2027년 9월 30일까지 연장하는 내용도 포함되어 있으며, 2028년 9월 30일까지 추가 연장이 가능할 수 있습니다.
SelectQuote는 지급 기한을 준수하고, 재무 구조를 강화하며, 핵심 비즈니스 라인에 대한 지속적인 투자를 지원하기 위해 모든 가능한 옵션에 대한 전략적 검토를 수행할 투자 은행을 고용했습니다.
SelectQuote, Inc. (NYSE: SLQT) a terminé une transaction de titrisation de 100 millions de dollars le 15 octobre 2024. Cette transaction offre un financement anticipé contre les encaissements prévus pour des polices précédemment vendues. Les créances de l'entreprise s'élevaient à environ 1 milliard de dollars au 30 juin 2024, seule une partie ayant été titrisée dans cet accord.
Les produits seront utilisés pour rembourser une partie de la dette à long terme en cours. La nouvelle dette titrisée offre un coût du capital inférieur à la dette actuelle. La transaction comprend également une extension de maturité pour la dette restante du 15 septembre 2025 au 30 septembre 2027, avec une extension supplémentaire potentielle jusqu'au 30 septembre 2028.
SelectQuote a engagé une banque d'investissement pour réaliser un examen stratégique de toutes les options disponibles afin de respecter les échéances de paiement, de renforcer le bilan et de financer des investissements continus dans les lignes d'activité principales.
SelectQuote, Inc. (NYSE: SLQT) hat am 15. Oktober 2024 eine 100 Millionen Dollar umfassende Verbriefungstransaktion abgeschlossen. Diese Transaktion bietet eine Vorausfinanzierung gegen erwartete Einnahmen aus bereits verkauften Policen. Die Forderungen des Unternehmens beliefen sich zum 30. Juni 2024 auf etwa 1 Milliarde Dollar, wobei nur ein Teil in diesem Geschäft verbriefet wurde.
Die Erlöse werden verwendet, um einen Teil der ausstehenden langfristigen Schulden zu tilgen. Die neu verbriefte Schuldenverpflichtung bietet einen geringeren Kapitalkosten als die aktuellen langfristigen Schulden. Die Transaktion umfasst auch eine Verlängerung der Fälligkeit für die verbleibenden langfristigen Schulden von 15. September 2025 bis 30. September 2027, mit einer möglichen weiteren Verlängerung bis zum 30. September 2028.
SelectQuote hat eine Investmentbank beauftragt, eine strategische Überprüfung aller verfügbaren Optionen durchzuführen, um Zahlungspflichten zu erfüllen, die Bilanz zu stärken und fortlaufende Investitionen in die Hauptgeschäftsbereiche zu finanzieren.
- Completed $100 million securitization transaction
- Lower cost of capital compared to current term debt
- Maturity extension for remaining term debt to September 30, 2027
- Potential for further extension to September 30, 2028
- Strategic review initiated to explore additional options for improving capital structure
- Only a portion of the $1 billion receivables balance was securitized
- Company still needs to meet agreed-upon payment milestones
Insights
SelectQuote's
- Lower cost of capital compared to existing term debt
- Extension of debt maturity from 2025 to 2027, with potential for further extension to 2028
- Improved financial flexibility for future growth initiatives
The strategic review by an investment bank suggests potential for further capital structure optimization. While this move strengthens SelectQuote's financial position, investors should monitor the company's ability to meet payment milestones and execute additional securitizations. The market's reaction will likely be positive, as this transaction addresses near-term debt concerns and potentially unlocks shareholder value.
This securitization deal is a innovative approach in the insurance distribution sector. SelectQuote's ability to monetize its policy sales through advanced financing demonstrates the strength of its business model and the predictability of its revenue streams. The transaction highlights several industry trends:
- Growing importance of financial engineering in insurance distribution
- Increasing value placed on customer lifetime value in Medicare and life insurance markets
- Shift towards more sophisticated capital management strategies among insurance intermediaries
SelectQuote's diverse business lines, including Medicare Advantage, Healthcare Services and traditional insurance products, provide a robust foundation for this financial strategy. The company's focus on the rapidly growing senior market, with 10,000 people turning 65 daily, positions it well for sustained growth and recurring revenue generation.
Securitization provides advanced financing against the Company’s expected collections for policies previously sold. The Company’s receivables totaled approximately
The transaction also includes a meaningful maturity extension for the remainder of SelectQuote’s term debt from September 15, 2025 to September 30, 2027, and provides a path to an additional extension to September 30, 2028 upon completion of agreed upon payment milestones. While the Company believes future securitization deals remain the most attractive solution to a permanent recapitalization, it has hired an investment bank to conduct a strategic review of all available options to meet the Company's payment milestones, strengthen the balance sheet, and fund continued investment in core business lines.
SelectQuote CEO Tim Danker commented, “This securitization marks an important milestone for SelectQuote. This innovative approach to financing our business comes at a significant improvement to the Company’s current cost of capital. This transaction marks a critical first step toward our ultimate goal of significantly improving our capital structure and unlocking value for shareholders.”
About SelectQuote:
Founded in 1985, SelectQuote (NYSE: SLQT) provides solutions that help consumers protect their most valuable assets: their families, health, and property. The Company pioneered the model of providing unbiased comparisons from multiple, highly-rated insurance companies allowing consumers to choose the policy and terms that best meet their unique needs. Two foundational pillars underpin SelectQuote’s success: a strong force of highly-trained and skilled agents who provide a consultative needs analysis for every consumer, and proprietary technology that sources and routes high-quality leads.
With an ecosystem offering high touchpoints for consumers across insurance, medicare, pharmacy, and value-based care, the Company now has four core business lines: SelectQuote Senior, SelectQuote Healthcare Services, SelectQuote Life, and SelectQuote Auto and Home. SelectQuote Senior serves the needs of a demographic that sees around 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans. SelectQuote Healthcare Services is comprised of the SelectRx Pharmacy, a Patient-Centered Pharmacy Home™ (PCPH) accredited pharmacy, and Healthcare Select which proactively connects consumers with a wide breadth of healthcare services supporting their needs.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241016309712/en/
Investor Relations:
Sloan Bohlen
877-678-4083
investorrelations@selectquote.com
Media:
Matt Gunter
913-286-4931
matt.gunter@selectquote.com
Source: SelectQuote, Inc.
FAQ
What was the value of SelectQuote's (SLQT) securitization transaction completed on October 15, 2024?
How will SelectQuote (SLQT) use the proceeds from the securitization?
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