Stocks & Securities arranges bond for microlender
Published:Tuesday | October 2, 2018 | 12:00 AM
Microfinancing firm McKayla Financial Services Limited has raised $100 million through a secured corporate bond arranged by brokerage Stocks & Securities Limited to finance new loans pay down more expensive bank debt.
With that transaction complete, SSL said it would be going after similar business from firms that want to lift the weight of bank loans off their balance sheets.
There is more demand for refinancing of debt through bonds, said SSL executive director Mark Croskery. The brokerage estimates that there is about a $2 billion market to be tapped in the micro sector.
"It is a niche we want to focus on," he said. "Banks look at the financials and have set metrics. We get to know the business, the owners and management team and also the intangibles."
The three-year bond arranged for McKayla was priced at 11 per cent. The microlender led by principal Sandra Spence as chairman and Delroy Josephs as managing director, has been in operation for 15 years. Spence, who founded the company in October 2002, declined to comment on the bond, beyond her statement in a release on the debt financing.
"McKayla funds the under-served and unbanked in our society," she said.
The microlending space has exploded in the last decade with competition growing rapidly. For instance, in 2008 microlending firms occupied two pages in the 2008 phone book but now that quantum has grown to 20 pages in the 2018 directory.
"McKayla was chosen because it was a strong company with strong leaders whose characters exuded confidence, and this is something that SSL plays close attention to, when selecting a client for a deal," SSL CEO Lamar Harris said in the release.