National Funding Closes Record $220M Securitization

This is National Funding's fourth and largest asset-backed securitization, significantly stepping up from their third issuance of $145 million in May 2025. The company's first securitization was for $120 million, followed by a second for $125 million, demonstrating a consistent growth in their ability to leverage capital markets. The deal was managed by Guggenheim Securities, who acted as the sole structuring agent and sole bookrunner. The notes were rated by Kroll Bond Rating Agency (KBRA), with the most senior class of notes receiving a strong AA- rating, indicating a high level of creditworthiness and low expected losses. The offering was approximately 3 times oversubscribed across all its bond classes, signaling very strong investor demand. An oversubscribed deal means more orders were received than there were securities to sell, reflecting high confidence in the quality of National Funding's small and medium-sized business loans. This high demand allowed for a 92-basis point yield improvement over a previous issuance. In financial terms, a basis point is one-hundredth of a percentage point, so this represents a significant 0.92% reduction in the yield paid to investors, lowering National Funding's cost of capital. The securitization is backed by a portfolio of loans made to small and medium-sized businesses (SMBs). The broader global market for small business loans was valued at $2.5 trillion in 2023 and is projected to grow to $7.2 trillion by 2032, highlighting the large and expanding nature of this financing sector. A recent report from KBRA noted that ratings for small business asset-backed securities have remained stable, with 90% of ratings being affirmed. This underlying stability in the asset class provides a solid foundation for investor confidence in securities like those issued by National Funding.