Chesswood Group Limited announced the closing by its subsidiary Pawnee Leasing Corporation of its second marketed U.S. securitization of receivables. Proceeds from this securitization were $183 million and will be used to repay Pawnee's two non-recourse asset-backed facilities with Capital One, Pawnee's warehouse facility and more than $100 million of Chesswood’s corporate revolving credit facility.
“This transaction substantially improves Chesswood's financial position by increasing liquidity and unlocking collateral in existing funding conduits. The success of this second ABS is evidence of Pawnee's high-quality portfolio and further demonstrates Chesswood’s ability to manage treasury and funding resources even in the current challenging economic environment,” said Ryan Marr, Chesswood's President and CEO. “The securitization market has provided us with a 100bps improvement in our cost-of-funds, in addition to freeing up approximately $30 million of equity which had been locked in existing facilities.”
In addition to completing this securitization transaction, Chesswood has also amended its corporate revolving credit facility, providing access to funding for originations that were previously restricted due to the COVID operating environment.
“This amendment, combined with the success of our ABS transaction, has provided us with the liquidity needed to fund our origination appetite in the current operating environment. With the closing of these transactions, the board is able to evaluate options to best use this additional available capital in the interests of Chesswood and our shareholders,” Marr added.
Chesswood Group Limited is North America's only publicly traded commercial equipment finance company focused on small and medium-sized businesses. Its Colorado-based Pawnee Leasing Corporation, founded in 1982, finances a highly diversified portfolio of commercial equipment leases and loans through relationships with over 600 independent brokers in the U.S. In Canada, Blue Chip Leasing Corporation has been originating and servicing commercial equipment leases and loans since 1996, and today operates through a nationwide network of more than 50 independent brokers. Located in Houston, TX, Tandem Finance Inc. provides equipment financing to small and medium-sized businesses in the U.S.