Splitit announces interest rate reduction via amendment of Goldman Sachs facility

Rhea-AI Summary

Splitit (ASX: SPT; OTCQX: SPTTY) announced on August 2, 2022, an amendment to its $150 million receivables funding facility with Goldman Sachs Bank USA, allowing for a 15% to 20% reduction in interest, contingent on achieving certain volumes. This change aims to enhance Splitit’s competitiveness globally. CFO Ben Malone highlighted this reduction as supportive of their expansion efforts, while CEO Nandan Sheth noted a 9x year-over-year improvement in net transaction margins, emphasizing their low-risk model and confidence in achieving profitability.

Positive

• Amendment to $150 million facility reduces interest costs by 15% to 20%.
• 9x improvement in year-over-year net transaction margin reported.

Negative

• None.

NEW YORK, Aug. 2, 2022 /PRNewswire/ -- Splitit (ASX: SPT) (OTCQX: SPTTY) announced that it signed an amendment to its existing $150 million receivables funding facility with Goldman Sachs Bank USA. The amendment reduces interest payable by Splitit in the range of 15% to 20%, assuming certain volumes are achieved. Additionally, the new commercial terms allow Splitit to be more competitive in the global market.

Splitit announces interest rate reduction via amendment of Goldman Sachs facility

"Last week, the Federal Open Market Committee increased the fed funds rate by 75 basis points. This week, we are very pleased that our funding partner reduced our facility rates in support of our global expansion," notes Splitit CFO Ben Malone. "These valuable savings will further reduce our expenditures, in addition to the operating expenditure reductions initiated throughout H1 2022."

"Splitit continues to remain highly differentiated from legacy BNPL providers. We do not share the sector-wide challenges of rising consumer defaults and reported in our Q2 FY22 Quarterly Report a 9x improvement in year-over-year net transaction margin. Our ability to reduce interest costs at this time is a testament to our unique low-risk model. As we scale, we are confident about our path to profitability," adds Nandan Sheth, Splitit CEO.

Further details regarding the amendment can be found in the company's recent ASX announcement.

About Splitit

Splitit is a global payment solution provider that enables shoppers to use the credit they've earned by breaking up purchases into monthly interest-free installments using their existing credit cards. 

Splitit powers the next generation of Buy Now, Pay Later (BNPL) through its merchant-branded Installments-as-a-Service platform. Splitit solves the challenges businesses face with legacy BNPL while unlocking BNPL at the point of sale for card networks, issuers and acquirers, all through a single network API.

Splitit's Instalments-as-a-Service platform mitigates issues with legacy BNPL like the declining conversion funnel, clutter at the checkout and a lack of control of the merchant's customer experience, putting the power back in the hands of merchants to nurture and retain customers, drive conversion and increase average order value. Splitit's white-label BNPL is the easiest installment option for merchants to adopt, integrate and operate while delivering an uncluttered, simplified experience embedded into their existing purchase flow. With no applications, redirects or new loans, Splitit is one of the most responsible installment payment options for customers.

Headquartered in New York, Splitit has an R&D center in Israel and offices in London and Australia. Splitit is listed on the Australian Securities Exchange (ASX) under ticker code SPT and trades on the US OTCQX under ticker SPTTY (ADRs) and STTTF (ordinary shares).

Contact Information

Brian Blank Splitit brian.blank@splitit.com +1 760 917 3321

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SOURCE Splitit USA, Inc.

FAQ

What is Splitit's recent announcement regarding their funding facility?

Splitit announced an amendment to its $150 million funding facility with Goldman Sachs, reducing interest by 15% to 20%.

How does the interest rate reduction benefit Splitit?

The interest rate reduction allows Splitit to enhance its competitiveness in the global market and reduce expenditures.

What financial improvements has Splitit achieved recently?

Splitit reported a 9x year-over-year improvement in net transaction margin.

What is the significance of the Goldman Sachs facility amendment for Splitit?

The amendment signifies supportive funding terms for Splitit's global expansion and long-term profitability.

When was Splitit's funding facility amendment announced?

The amendment was announced on August 2, 2022.