Credit Suisse provides $200m to OnDeck

The borrower said it will use the facility to help it ‘diversify funding sources, extend debt maturities, and create additional funding capacity to pave the way for future loan growth’.

Credit Suisse has provided online lender OnDeck with up to $200 million, a portion of which will be used to pay off debt scheduled to mature in six months.

The new two-year asset-backed revolver is priced at the commercial paper rate, announced by the Federal Reserve, plus 2.25 percent.  Specifically, the loan breaks down to $125 million of committed capacity and another $75 million available at the lender’s discretion.

The facility contains unspecified covenants for maximum leverage as well as minimum unrestricted cash. It is secured by a pool of small business loans.

The New York-based borrower will spend the remaining debt on $100 million in liabilities to come due in June. The loan was priced at 2.8 percent and had $67.31 million outstanding, both as of 30 September.

Howard Katzenberg, chief financial officer at OnDeck, said in a statement that the new credit facility will help the firm “diversify funding sources, extend debt maturities, and create additional funding capacity to pave the way for future loan growth”.

OnDeck declined to comment further on the facility, while Credit Suisse was not immediately available.

OnDeck has deployed over $5 billion to more than 60,000 customers in 700 different industries across the US, Canada, and Australia since its founding in 2007, according to the statement.

Credit Suisse has a total of SFr725 billion (€673.87 billion, $718 billion) in assets under management as of the end of September, up 9 percent compared with the end of third quarter last year, according to the bank’s latest quarterly earnings statement. The company’s adjusted return on capital last quarter was 8.6 percent, compared to 12.6 percent the same time last year.

The global private bank and wealth manager is based in Zurich, Switzerland and was founded in 1856.