After ousting Anthony Nantes as CEO in August 2023 (and subsequently seeing John Nantes depart as Chairman), consumer lending company Wisr (ASX: WZR) has been on a cost management journey, trying to regain shareholders’ faith.
In the face of its declining loan book balance and revenue, the Company has established the pricing for its fourth ABS (asset-backed security) transaction, named the $200 million Wisr Freedom Trust 2023-1. This transaction consists of seven tranches, with the senior tranche (Class A) receiving an AAA rating from the credit rating agency Moody’s. National Australia Bank (ASX: NAB) served as the Arranger, Dealer, and Lead Manager.
Chief Executive Officer, Wisr, Andrew Goodwin, said, “We’re very pleased with the investor support for Wisr’s fourth ABS transaction – our second for 2023. The Wisr Freedom Trust 2023-1 will further diversify our funding platform, decrease our cost of funds and create $200 million of additional capacity in WH1.
“This milestone follows the $200M Wisr Independence Trust 2023-1 in February 2023. The Company also added balance sheet strength through the sale of Freedom 2021 G1 notes in Q4 FY23 and the partial sale of Freedom 2022 G1 notes in Q2FY24.”
This positive funding development comes after Wisr underwent a leadership change, with Matthew Brown assuming the role of the new Chair and Andrew Goodwin becoming the new CEO.
The former CEO, Anthony Nantes, is currently facing criminal charges in NSW and was denied bail after he was alleged to be stalking. There is a violence order against him, and his lack of adeptness as CEO was compounded when he went through a female manager’s text messages and sacked her.
In Q1 FY24, Wisr’s revenue dropped from $25 million in Q4 FY23 to $24 million, while the loan book balance decreased from $931 million to $887 million. The Company also incurred an EBITDA loss of $800,000.
To tackle these challenges, Wisr initiated a transaction to cut costs and boost funding capacity for the $887 million loan book. This strategic move aims to prepare for future expansion when market conditions allow. The Wisr Freedom Trust 2023-1 transaction brings the total ABS transactions value to $875 million, with the last three, including this one, arranged by NAB and achieving a AAA Moody’s rating (highest quality subject to the lowest level of credit risk) for top tranches.
Goodwin added, “Despite the challenging macroeconomic conditions and moderated loan volume strategy in place, the transaction reflects the debt market’s confidence in the Company, including the quality of the prime loan book along with the strong risk and operational frameworks in place.
“We’ve continued to pursue a moderated loan volume strategy while remaining focused on net interest margin expansion and profitability. This strategy will remain in place until conditions are deemed appropriate to recommence scaling.”
Wisr’s goal at the moment is simply to get things back on track—both financially and in leadership terms. And the Wisr Freedom Trust 2023-1 transaction is a crucial step.
The transaction is due for settlement in the week of December 11, 2023.
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