Newtek’s Loan Pools of Unguaranteed Portion of SBA 7(a) Loans Receive Investment Ratings Upgrades

Barry Sloane, Chairman, President and Chief Executive Officer says, “We are pleased that S&P Global Ratings has upgraded their investment-grade ratings on two of the Company’s most seasoned securitizations outstanding. The loans in these securitizations were underwritten prior to COVID-19 and experienced the effects of the pandemic plus the interest rate shocks of 2022 and 2023, and still outperformed credit expectations.  As an organization that was a non-bank lender until 2023, Newtek used securitizations to fund its SBA 7(a) origination and portfolio activity. We believe that the 2018-1 and 2019-1 vintage transactions, that are nearing their 20% clean-up calls and are secured by slightly under 25% of the outstanding balances of Newtek Small Business Finance’s portfolio, are representative of the quality of Newtek’s unique method of loan acquisition, underwriting, and portfolio management.”

“In addition, the Company resources that are used to originate SBA 7(a) loans are the same resources that we use to originate loans in our alternative loan financing program (previously referred to as non-conforming loans), and our bank loans that are not part of a government-lending program. Today, our alternative financing loan program, financed through joint ventures and securitizations, has not experienced a single charge off since we began originating these loans in 2019. We have also had a similar type of charge-off experience in our SBA 504 program, which is also now funded at Newtek Bank, N.A.”

S&P Global Ratings raised its ratings on a total of four classes of notes issued by Newtek Small Business Loan Trusts 2018-1 and 2019-1. The Newtek Small Business Loan Trust 2018-1, Class A Notes were raised to “A+ (sf)” from “A (sf)’’ and the Class B Notes was raised to “BBB (sf)” from “BBB- (sf).” In addition, the Newtek Small Business Loan Trust 2019-1 Class A Notes were raised to “A+ (sf)” from “A (sf)” and the Class B Notes were raised to “BBB (sf)” from “BBB- (sf).”