GreenSky Completes Over $2.5 Billion of New Funding
Monday, October 26th, 2020
GreenSky, Inc., a leading financial technology company Powering Commerce at the Point of Sale, announced today it has entered into a new, long-term, $600 million per year, bank funding partnership totaling up to $1.8 billion for its elective healthcare business. GreenSky has also recently completed approximately $875 million of new asset sales demonstrating the successful execution of the Company’s previously announced diversified funding strategy.
“I am very pleased to announce GreenSky’s latest strategic bank alliance, which I anticipate will serve as a significant catalyst for our elective healthcare business,” said David Zalik, GreenSky Chairman and CEO. “I am excited to have a new core GreenSky lending partner funding our Patient Solutions activities as we look to reignite our elective healthcare consumer loan platform in 2020 and beyond.”
In addition to the new $1.8 billion commitment, GreenSky recently executed a total of $875 million in loan participation and whole loan sales to institutional asset managers and bank partners, which included a loan sale to the new bank partner and an increase to an existing bank partner’s funding commitment by $100 million.
“These recent transactions demonstrate GreenSky’s strong access to funding. The loan participation sales create incremental available capacity, and the increase in bank commitments show continued support from our bank partners,” said Andrew Kang, Chief Financial Officer. “These are but the first in a series of programmatic initiatives to diversify and optimize the Company’s funding profile in order to continue to support our consumers and merchants through the strategic growth of our business.”
“These sales, which were executed at an average price of approximately 95% of principal, will partially decrease third quarter 2020 net income. In future periods, however, they will also reduce total cost of revenue and earnings volatility through lower net Finance Charge Reversal (“FCR”) amounts. Additionally, we will continue to earn servicing fees on these assets. We are pleased with these executions and with the implications on our margin and profitability,” said Kang.