Oportun Financial Corporation (NASDAQ: OPRT) is seeing a significant rise on the US stock charts, with shares increasing by 15.06%, trading at $2.98. This surge follows an announcement of strategic efforts aimed at optimizing its capital structure and boosting profitability.
Oportun taking Refinancing Initiative to Enhance Flexibility
Oportun (OPRT) has signed a new $235 million Senior Secured Term Loan contract as part of its capital optimization plan. The goal of this action is to refinance the business’s current corporate financing arrangement.
Oportun’s balance sheet will improve as a result of the refinance, reflecting the company’s improved profitability and giving it more operating flexibility. Notably, OPRT’s credit card portfolio will be sold as part of the refinance, allowing the business to enhance cash flow and provide incentives for accretive measures.
Term Loan Details and Key Stakeholders
The Term Loan will be financed by two prominent firms—Castlelake L.P., a global alternative investment manager, and Neuberger Berman, a private employee-owned investment firm. This loan will carry a fixed interest rate of 15% and is set to mature in November 2028.
Following a comprehensive evaluation of various strategic alternatives, the Board of Directors identified this refinancing as the least dilutive option, strengthening Oportun’s liquidity while enhancing its ability to generate consistent cash flow.
Future Outlook and Profitability for OPRT
The completion of this refinancing positions Oportun to further build on its recent progress. The company anticipates improved credit performance and increased profitability in 2025, with a focus on high-quality originations. In addition, OPRT aims to continue enhancing its GAAP and adjusted earnings per share.
Although the issuance of new warrants may have a dilutionary impact, Oportun believes that its focus on core products, credit performance, and cost discipline will drive long-term profitability. In connection with the loan, the lenders will receive warrants equal to 9.8% of OPRT fully diluted shares, with Board observer rights, reinforcing their involvement in the company’s ongoing success.
