at a time when rates have been creeping up in general economy, good news that chw closed huge us$350m securitization that has lowered cost of funds by 100 bps. testament to good performance by previous securitizations that this size deal was able to be done. bodes well for future. chw was moving loan book to more prime credits, which lowers realized margin, but by also lowering cost of funds, does offset this pressure. with big growth of new business in 2021 and 2022, and stability in net interest margin, shud lead to big growth in earnings/free cash and dividends (up to max of 40 percent of earnings/free cash).
still think +$20 stock by end of 2022...
"Proceeds from this securitization totalled US$356 million and will be used to repay Pawnee's warehouse facility and more than US$140 million of Chesswood's corporate revolving credit facility.
"This transaction substantially improves Chesswood's financial position by increasing liquidity and providing us with an approximate 100bps improvement in our cost-of-funds. The success of this asset-backed securitization is evidence of Pawnee's high quality portfolio and further demonstrates Chesswood's ability to manage treasury and funding resources, allowing us to continue to grow the business" said Ryan Marr, Chesswood's President and CEO."