SelectQuote Shares Surge After Healthcare Platform Confirms $100M Securitization Deal

SelectQuote, Inc. (NYSE:SLQT) shares are trading higher premarket on Thursday. On Wednesday, the company disclosed the completion of a $100 million securitization transaction on October 15, 2024.

This securitization provides financing based on the company's expected collections from previously sold policies.

As of June 30, SelectQuote’s receivables totaled approximately $1 billion, with only a portion securitized in this transaction.

The company will use the proceeds to reduce a portion of the company's outstanding term debt, as the new securitized debt offers a significantly lower cost of capital.

The transaction also extends the maturity of SelectQuote’s remaining term debt from September 15, 2025, to September 30, 2027, with the potential for an additional extension to September 30, 2028, contingent on meeting specific payment milestones.

CEO Tim Danker said, “This securitization marks an important milestone for SelectQuote. This innovative approach to financing our business comes at a significant improvement to the company’s current cost of capital.”

Last month, SelectQuote reported fourth-quarter EPS loss of $(0.18), missing the estimated $(0.15) and sales of $307.2 million, falling short of the $272.950 million estimate.

As of June 30, the company has cash and cash equivalents of $42.7 million.

Price Action: SLQT shares are up 15.6% at $2.60 premarket at the last check Thursday.

Read Next:

• Is SelectQuote a Double-Bagger Stock? Analysts Predict Huge Gains