Bankers Healthcare Group, a leading provider of financial solutions for licensed healthcare practitioners and other highly skilled professionals, issued $159.6 million in notes backed by high-quality commercial and consumer loans to increase its liquidity and diversify its funding sources. Credit Suisse Securities (USA) LLC was the sole structuring agent and sole bookrunner on the transaction, which priced on July 20, 2020, at a weighted average coupon and yield of 3.62% and 3.88% respectively.
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In addition to being the first non-SBA small business loan transaction to come to market since the COVID-19 pandemic began, BHG’s deal was likely the first term ABS transaction backed by a mix of commercial and consumer loans and the first small business or consumer loan transaction to be rated ‘AA’ by Kroll on the inaugural issuance.1
“As BHG grows its originations from year to year, this type of diversification becomes key to our growth strategy,” said Dan McSherry, Chief Financial Officer at Bankers Healthcare Group. “Selling large blocks of loans in a pooled securitization allows us to balance income recognition and provides a means to smooth out earnings over time.”
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BHG’s move into the ABS market was made to open up additional funding channels and allow the company to diversify earnings over a seven- to 10-year period. Established in 2001, BHG is the number-one source for medical and professional loans, which are primarily sold through the BHG Loan Hub, a state-of-the-art digital loan delivery platform, to more than 1,100 banks across the country. In 2019, the company experienced record growth of a 110% increase in income.
“We’re proud to secure funding from the ABS market as we continue our mission to provide the most innovative financial solutions on the market today. This new funding channel will enable us to build on our reputation for being fast, flexible, and hassle-free,” said Al Crawford, Co-Founder, Chairman, and CEO of Bankers Healthcare Group. “Not only does this pave the way for BHG to explore new growth opportunities, but it demonstrates the strength of our business model.”
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