A pool of mid-ticket commercial equipment leases and loans that Amur Equipment Finance had originated will secure $476.2 million in notes, issued to investors through the Amur Equipment Finance Receivables XIV LLC, series 2024-2.
Truist Securities is lead manager on the deal, according to analysts at Fitch Ratings. Amur Equipment, 2024-2, will issue the notes through six tranches of class A, B, C, D and E notes, Fitch said. The A1 notes mature on July 12, 2025; the A2 through C notes mature on July 21, 2031; the class D notes mature on Oct. 20, 2031; and the class E notes on Oct. 20, 2032.
Conventional trucks with sleeper compartments make up the largest exposure to the collateral, with a 24.3% slice of the pool, and virtually all of the 3,549 underlying contracts are backed by personal guarantees, Fitch said. In prior securitizations, long-haul transportation equipment had the highest concentration, with 27.46% and 30.78% on the 2024-1 and 2023-1 pools, respectively.
Among the deal's potential credit drawbacks is adverse pool selection risk. Prefunding and substitution can be as high as 20% and 15%, respectively, of the initial collateral pool, Fitch said. There are a couple of concentration risks, too, the company said. Some 45.2% of Amur Equipment, 2024-2's collateral is in the transportation sector. That concentration is higher than the previous series, the 2024-1, and presents an issue because the transportation sector has been under pressure for more than a year.
Amur Equipment's notes benefit from subordination, a non-declining reserve account representing 1.00% of the initial adjusted discounted pool balance, and initial overcollateralization (OC) equal to 8.00% of the initial discounted pool balance, Fitch said. With those layers of protection, classes A1 and A2 benefit from 27.85% in credit enhancement, while the class B, C, D and E notes receive 23.35%, 17.70%, 11.70% and 9.00% in enhancement, Fitch said.
Outside of conventional trucks with sleeper compartments, construction heavy equipment, medical aesthetics, dump trucks and service/utility/mechanic trucks account represent 7.59%, 7.15%, 7.10% and 5.63% of the pool, respectively.
Fitch assigns F1+ to the A1 notes; AAA to the A2 notes; AA to the B notes; A to the C notes; BBB to the D notes; and BB to the E notes.
