Newtek Business Services Prices Baby Bonds

As predicted by some the new Newtek (NASDAQ:NEWT) baby bonds have priced at 5.75%.

Here are the details of the issue known at this point.

NOTE–issue is unrated by major rating agencies, but rated A-/BBB+ by Egan Jones.

Over the years I have gotten to like Newtek issues, but I am on the fence on this one. 5.75% may be too low for me to make a buy–but given the current marketplace who knows for sure.

I am looking for this one to trade sometime next week on the NASDAQ under ticker NEWTL. Of course there will be no OTC Grey market exchange trading prior to the NASDAQ listing, but for those looking for an early purchase checking with your brokerage bond desk next week may be fruitful.

The pricing term sheet can be read here.

19 thoughts on “Newtek Business Services Prices Baby Bonds”

  1. NEWTL final prospectus = 728 pages! That’s got to be a new record, especially for a small issue like this one…..

  2. I bought most of the $25 IG IPOs this year. Cashed out call risks and most non-IG buys from last year. Most of the IPOs are up over 5%, highest is the 6% JPM-C up 10% and worst is 5.75% SREA up 3.3%. I bought sub IG AQNB, MBINP, NRZ-A and AHH all went up too. I don’t want to sell anything, as in immediately. The fall in yields this year didn’t surprise me but speed and extent did surprise me. People will fully wake up to hilarious YTW on stuff. The JPM-C is 3.1% right now, NRUC issue is higher at 3.28%. More hilarious than the IPO coupons so I think the next run up will derive from YTW rotation. That’s great news for all total crap IG IPOs. Good for this at 5.75% too but the credit spread is scary to me but probably not for many people. Junk probably runs up on YTW story same but I’d rather have IG than junk for a big kabluey. Except of course when IG banks cause the big kabluey I don’t want a lot of IG banks for that. Usually IG currency is better than junk currency if you want liquidity during stress. We already had our warning pretty loud and clear. I’m glad not looking to buy anything at this time. It’s very hyper and unpredictable to me.

    1. The holders of the 2022 bonds just took a beating yesterday.
      Caveat emptor when you buy a callable bond way above par.

    2. The issue here is also that the ‘new status quo’ stays in place so long and there is so much participation by brokers, privates and public that it’s easy to think physics have been suspended. Is there really a New Relativism?
      Of the positions I hold, I see the ones taken on my sell limits are the ones I had picked for call coverage not particularly yield. Issues have been taken on sell limits by those reaching up reach up on what i had believed to be ridiculous premia. So I get out. Some were just partials I had added to over my typical allocation of $10,000+/-. I have faith this restores a pragmatic balance. Maybe I should have monitored more closely and raised some of the limits? Last night I did reset some orders on call covered issues. Also, I have nosed into some global deep value holdings this year where I can let them sit for 10+ years if need be (not the purview of this site). I suppose this is a reflection we are all going through.
      I am trying not to be a jockey anymore but Times dictate the actions sometimes. In 1999 (age 41) I converted all of my IRA assets into deep value Roth against my CPA advise. If it wasn’t for the income and averaging DOWN it would have just treadled for years, BUT capital was preserved.
      Before the captain took the bridge during a huge storm, he re-opened his safe and re-read a the note there: “Starboard-Right, Port-Left”.
      Stay the Course! J PS: who needs some BANFP?

      1. BANFP got up to close to $29.00 at one point and is still hovering above 27.
        Talk about nosebleed prices. I won’t touch a bond/preferred if the price is greater than par plus the next income payment.

          1. Focusing too much on nickels and dimes or being solely engaged in the minutiae of individual issues carries risk of being oblivious to the macro trend until after the train leaves the station. I think the macro trend has been well presented on this site for consideration. Most people are wired tactical rather than strategic though.

            1. P, its possible you may just be catching snippets of posts from people and gathering false conclusions in totality. For example me and my recent flip posts….Percentage wise, I am in more noncallable, or redeem me and slap me a nice cap gain redemption notice preferreds than I have ever been in.

              1. Grid, not directed at you in any way. On the contrary I have great respect for your conservative approach. I value your insights and at times have profited from them. I do think it’s an issue in general but that’s just my opinion. You think it’s not?

                1. P, I would never be offended by your posts as I enjoy them. I just like discussing. And even if you were contrarian to any thoughts I have, I would like it too.
                  I guess it depends on ones fears and goals. Some play defense and some play offense. And admittedly some like to have a bit of fun which I am guilty as charged of myself, lol.
                  Too be honest I wonder if too many of us are getting on one side of the boat already. But….the pattern is clear, the two times in past 10 years the 10 yr crawled above 3% and higher forward expectations, it routed backwards quickly.
                  We are are right back yield wise where we were in 2013. I was looking at an old Morningstar post from then, and people were complaining that IG preferreds were toiling in the 5%-5.5% area then. But as you know the horse bucked a few times with excellent opportunities in between.

                  1. Grid, if you will remember December you know nobody likes bloody decks better than me. Well, maybe you do. That’s when real money is made, or lost. I am only saying it’s to the point where any piece of crap gets fawned over and I fear some day there will be a lot of stunned faces going what just happened to my precious. Right now I prefer IG with some call life left in them if that happens. I think playing a bit of defense now means being able to play better offense down the road. I have my sock drawer of course and some old and really good stuff but it’s unlikely to be used as trading stock. As I said, we choose tactical or strategic and to each his own.

      2. John, interesting times and if only we knew the answers we could make some good money on a website called Seeking Alpha. They pay brilliant investing minds to write valuable stuff there. It’s a gold mine for investors but I don’t use it. Good luck with your sales, sounds like you’re downsizing.

        1. Gman–yes it was, but on rare occasions tickers are reused. NEWTL is what they have published–maybe they will change it.

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