Amur Equipment Finance a commercial equipment lessor is planning to raise about $466 million in asset-backed securities, in a deal due out in about a week.
The transaction, called Amur Equipment Finance Receivables XI, will issue about seven classes of notes that appear to pay with variable rate coupons.
A substantial majority of the contracts, 95.8%, in the statistical asset pool as of the statistical calculation date were supported by guarantees with a weighted average (WA), non-zero guarantor FICO score of about 716, according to a pre-sale report from Morningstar | DBRS.
Founded in 1996, Amur finances a wide variety of equipment, but it has focused its more heavily on originations on long- and short-haul trucks and trailers. It has also done brisk business in construction, industrial and manufacturing equipment, as well as aesthetic medical equipment, according to the rating agency.
Amur Equipment Finance will issue notes through a senior-subordinate structure, where principal payments on class A-2 notes are subordinated to the class A-1 notes. After that, in this case classes B through F, each note class will receive principal payments after its immediately senior class is paid in full, DBRS said.
Initially, the notes benefit from credit enhancement ranging from 89.1% in the $59.4 million A-1 notes to 8.0% on the $6.0 million class F notes, according to DBRS.
Otherwise, the notes benefit from overcollateralization, proceeds from aggregate residuals and a cash reserve. On the deal's closing date, overcollateralization will be equal to 7.05% and a level that is either the greater of 8.5% of the current adjusted discounted pool balance or 1.75% of the adjusted discounted pool balance as of the initial cut-off date.
As for aggregate residuals, another potential credit enhancement to the notes, the statistical asset pool starts off with about $109,307 in booked value of residuals. These residuals are funded in a number of ways, including the sale of equipment that the servicer receives at the end of a related contract of net amounts that the servicer might collect as judgments against an obligor that might have fallen behind in payments. Amur Equipment Finance, the deal's sponsor and loan originator, will also service the notes.
DBRS expects to assign ratings of R-1 on the A-1 notes. After that, ratings should range from 'AAA' on the A-2 notes to 'B' on the F notes.
As of the initial statistical calculation date, DBRA says, the asset pool had an aggregate statistical discounted contract balance of about $389.7 million. The pool had an aggregate contract balance of $389.7b million and 4,899 contracts, with 4,683 obligors.
On average, the discounted contract balance was about $79,549, and no contract had a discounted contract balance of more than $1.4 million. The statistical asset pool had a WA seasoning of about five months as of the statistical calculation date.
The pool appears to be highly diversified, as the top 10 obligors accounted for 3.67% of the Statistical Asset Pool, as of the Statistical Calculation Date. Also, the pool's exposure to the single-largest obligor during the three-month prefunding period will be limited to 1.0%.
