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Good idea for Print Leasing Co. GreatAmerica to Borrow Another $655,260,000?
How GreatAmerica Uses Securitization to Grow Its Business and Serve Its Customers. GreatAmerica, a commercial equipment finance company, has been borrowing money through securitization, a process of pooling and selling financial assets to investors as securities. This allows the company to raise capital, diversify risk, and improve liquidity, while lowering the cost of borrowing and increasing the availability of credit for its customers.
The company has closed on its 24th term securitization in $655,260,000 of privately placed bonds, bringing its total bond issuances to $9.9 billion. The bonds are rated as AAA by S&P and Fitch, reflecting the high quality and low risk of the underlying assets. The investor interest was also strong, as the company received over $2.5 billion in orders, 3.8 times the amount of bonds offered.
GreatAmerica uses securitization as a way to leverage debt to grow its business and provide financing solutions to its customers, who are mainly small and medium-sized businesses in various industries. The company offers leasing, financing, and managed services for equipment such as copiers, printers, computers, software, and telecom. The company prides itself on its customer service, innovation, and culture.
By borrowing money through securitization, GreatAmerica can access more funds at lower rates than traditional bank loans or corporate bonds. This enables the company to offer more competitive and flexible terms to its customers, who can benefit from lower monthly payments, tax advantages, and better cash flow management. The company can also diversify its funding sources and reduce its exposure to market fluctuations, interest rate changes, or economic downturns.
However, borrowing money through securitization also comes with some challenges and risks. The company has to comply with various regulations and reporting requirements, as well as maintain the quality and performance of its assets. The company also has to manage its debt obligations and ensure that it has enough income and cash flow to repay its investors. The company also has to monitor its debt-to-equity ratio, which measures how much debt it is using relative to its equity, to ensure that it is not overleveraged or undercapitalized.
GreatAmerica is an example of a company that uses securitization as a sound and strategic way to borrow money and grow its business. The company has been able to leverage debt to expand its customer base, increase its market share, and enhance its reputation. The company has also been able to provide financing solutions to its customers, who can access more affordable and convenient equipment for their businesses. The company has also been able to mitigate the risks and challenges of borrowing money by maintaining its high standards of quality, performance, and service.
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