NewtekOne debt ratings published by KBRA as bank transition shapes outlook
NewtekOne is carrying stable long-term ratings as its shift toward a more deposit-funded banking model changes how it generates earnings and manages capital. KBRA also assigns a BBB- rating to the company’s $50 million of 8.125% senior unsecured notes due in February 2029, while keeping the outlook on all long-term ratings at Stable.
Highlights
- KBRA assigned NewtekOne a BBB- senior unsecured debt rating, BB+ subordinated debt rating, and K3 short-term rating on May 14, 2026.
- NewtekOne's shift toward retaining more SBA 7(a) loans and expanding bank lending may increase earnings predictability but pressure near-term profitability.
- Consolidated CET1 capital stands at about 18%, but lower Newtek Bank CET1 at 11.5% and nearly 200% parent double leverage constrain ratings.
Ratings detail and balance sheet transition
As reported by KBRA, NewtekOne holds a senior unsecured debt rating of BBB-, a subordinated debt rating of BB+, and a short-term debt rating of K3, while lead subsidiary Newtek Bank, N.A. carries deposit and senior unsecured debt ratings of BBB, a subordinated debt rating of BBB-, and short-term deposit and debt ratings of K3. The ratings were assigned on an unpublished basis on May 14, 2026.KBRA says the ratings reflect strong current and expected earnings, supported by loan pricing, gain-on-sale margins on SBA products, fee income from payments processing, and technology-led underwriting and portfolio management. The agency says Newtek is shifting from a historical focus on loan sales toward retaining more government-guaranteed SBA 7(a) loans and moving more lending into the bank, a change that could make earnings more predictable over time but may weigh on near-term profitability as interest income replaces upfront sale gains.
KBRA also points to solid capital at the consolidated level, with common equity tier 1 capital at about 18% and allowance for credit losses at around 2.8% of loans. However, lower capital at the bank level, with CET1 near 11.5% in the second quarter of 2026, and parent-level double leverage of nearly 200% remain constraints on the rating as the group expands bank-based lending activity.
Our earlier coverage of Equites Property Fund’s UK exit and South Africa reinvestment highlighted how the REIT raised its interim distribution after selling the £200.5 million Aviva portfolio and redirecting capital domestically. We noted that the disposal helped cut leverage, supported liquidity, and positioned the group to fund logistics growth in South Africa while maintaining its FY27 guidance.
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