Oportun, a mission-driven financial services company, has taken a significant step towards optimizing its capital structure to drive enhanced profitability.
The company has secured a new $235m Senior Secured Term Loan through a Credit Agreement, aimed at refinancing its existing corporate financing facility. This move is part of a broader strategy to improve operational and balance sheet flexibility.
The $235m Term Loan has been provided by funds managed by Castlelake, a global alternative investment manager specializing in asset-based private credit, and Neuberger Berman, a private employee-owned investment manager.
The loan, fixed at a 15% rate, is set to mature in November 2028.
Oportun is committed to strengthening its financial position. The funds from the Term Loan will be used to offer greater balance sheet flexibility, which includes plans to sell the company’s credit card portfolio as part of its strategy to focus on core products and services. This will enable the company to generate more consistent cash flow and potentially increase stockholder value through improved credit performance and strategic originations.
Oportun’s Lead Independent Director, Neil Williams, said, “After a thorough and competitive process, where multiple strategic options were considered, the Board of Directors determined that this transaction, which was the least dilutive financing option available, would best position Oportun for the future by further strengthening the Company’s balance sheet and liquidity as well as enhancing the ability for Oportun to generate consistent cash flow and deliver increased stockholder value.”
Raul Vazquez, CEO of Oportun, also noted, “With this refinancing and the operational and balance sheet flexibility the Term Loan will provide, we’re even better positioned to build on our progress. We expect to build on that momentum in 2025 through improving credit performance, identifying high-quality originations, and further enhancing our GAAP and adjusted profitability on a per-share basis.”
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