Calgary-based Neo Financial has closed a $185-million syndicated warehouse facility led by ATB Financial, with participation from four Canadian credit unions.
The financing expands funding capacity for Neo’s credit card receivables. It also includes an accordion provision allowing the facility to potentially increase to $250 million, above the $185 million currently committed.
ATB is serving as administrative agent, lead arranger and sole bookrunner. Participating credit unions include Vancity, Beem Credit Union, Alterna Savings and Credit Union Limited, and Innovation Federal Credit Union.
“Credit unions are important partners in the financial system we want to help build,” said Allemander Neto, chief financial officer of Neo Financial.
Neto said Neo has developed its credit card platform to accommodate participation from other institutions, with the goal of establishing long-term funding relationships with credit unions.
The announcement builds on a series of financing milestones for the fintech this year.
In February, Fintech.ca reported on Neo’s $68.5-million Canadian-led funding round, which attracted more than 100 investors. At the time, Neo said the capital would support the launch of its inaugural securitization program, providing another avenue to finance growth in its lending portfolio.
That was followed in April by Neo’s entry into institutional capital markets with support from BMO and SAF Group, through a $150-million inaugural credit card securitization.
Together, the transactions illustrate Neo’s efforts to broaden the institutional relationships supporting its credit business. The latest facility brings credit unions into that funding strategy, positioning them as partners in the growth of a Canadian digital challenger.
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