First rated ABS issuance backed by small business loans in the Australasian market
Prospa’s Australian small business loan asset backed securities (ABS) trust was today assigned ratings by Moody’s Investors Service (Moody’s). A total of A$83.25 million in debt securities were rated. The ratings are as follows:
Issuer: Prospa Trust Series 2018-1
- A$64.80 million Class A Notes, Assigned A3
- A$14.67 million Class B Notes, Assigned Ba2
- 78 million Class C Notes, Assigned B3
This is the first rated ABS issuance backed by unsecured small business loans in the Australasian market giving Class A, Class B and Class C notes from Prospa Trust Series 2018-1 an investment grade rating from one of the leading global ratings agencies.
Prospa’s Joint Chief Executive, Beau Bertoli, said: “We are delighted to have been assigned ratings by Moody’s for our small business loan ABS trust. This is an important milestone in the diversification of our funding that will appeal to a broader group of fixed income institutional investors.”
The initial underlying receivables are short-term, high yield, unsecured, amortising loans made to Australian small businesses. The initial average term of the unsecured loans is approximately 12 months, with the maximum loan term of 24 months. The average loan size is $A26,000. All business loans benefit from a personal guarantee generally from the small business owner or a director. Secured loans are also eligible to be included in the collateral pool and have a maximum term of 36 months.
Prospa is Australia’s leading online lender to small business. As of March 2018, Prospa had funded over A$500 million of business loans to more than 12,000 small business owners in Australia.
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