Newtek Business Services (NEWT) has announced they are selling a new issue of $25 baby bonds.
NEWT currently has 2 baby bonds trading–a 6.25% coupon and a 5.75% coupon which can be seen here. The 6.25% issue is currently callable and the company has indicated they MAY call the 6.25% issue.
The preliminary prospectus can be found here.
j was very speedy on this issue–I think he/she is living on the SEC website.
12 thoughts on “BDC Newtek Business Services to Sell Baby Bond”
Is there something written in the prospectus or elsewhere causing you to think they may use proceeds to redeem the 6.25% or are you just using logic?
We may use the net proceeds from the sale of the Notes to fully or partially pay down, retire, or redeem certain of our outstanding indebtedness, including the outstanding 2023 Notes. As of January 12, 2021, we had approximately $57.5 million of aggregate principal amount outstanding, plus accrued interest, of 2023 Notes, which mature on March 1, 2023 and bear interest at a rate of 6.25%
Thanks, J. Any whisper talk about the rate on the new notes?
Other BDCs have been issuing par $1000 at 4 7/8 but I imagine there will be a bit of a premium on a $25 bond.
“whisper talk about the rate on the new notes” is kinda mcg and Earlybird’s ability…
Broker indicated 5.5% to me, however I think it will be priced with a lower yield.
Yes, but did your broker say anything about actual maturity???? It’s left blank in the prelim prospectus, so maybe 5.50% implies they’re talking about a longer maturity than the normal 5-7 year for BDC baby bonds though 5 year is what they’ve always done in the past………
He indicated 5.5% for 5 years with a disclaimer. I owed him a favor so I took some. KBW/Stifel typically prices deals favorably for investor.
AF – sounds like a great way to pay off a favor owed…. let’s see who owes whom after the final pricing but if it prices as a 5 year 5.50% issue I think you’ll still owe him not the other way around……
5.5% for 5 years would be too good to be true, so it probably won’t happen. In addition, it was all you can eat.
see j’s note below.
LI – it’s always just a quick flip to the “Use Of Proceeds” section of a prospectus to find out stuff like this…….
Ah, thanks. I’ve generally looked to the press release for use of proceeds info which this one didn’t have. Good to know it’s in the prospectus.