Been watching this for a time this has been on my watch list for a while since it has been outperforming other financials and chart look pretty good. I guess question around big insider buying answered below. to get this size deal done and lower cost of funding by 1% amid Covid - kudos. with all this freed up liquidity now, and management stating they have available excess capital, reinstate the dividend ? the lending side of the business must be going fine for this size deal to get done at that yield...trading at well below book if the figures im looking at are accurate.
TORONTO , Sept. 30, 2020 /CNW/ - Chesswood Group Limited ("Chesswood") (TSX: CHW) is pleased to announce the closing by its subsidiary Pawnee Leasing Corporation ("Pawnee") of its second marketed U.S. securitization of receivables. Proceeds from this securitization were U.S. $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 U.S. $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 U.S. $30 million of equity which had been locked in existing facilities" added Marr.
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.