After avoiding the securitization market for two years, Amur Equipment Finance is becoming a regular issuer.
The Grand Island, Nebraska, lessor, formerly known as Axis Capital, is making a second trip to the securitization market this year. The $226.5 million transaction looks very similar to the previous one; the heaviest concentration of receivables is long-haul trucks (23.3%), followed by trailers (21.2%), heavy equipment (11.9%) and short-haul trucks (9.3%).
At closing, just $180.1 million of proceeds will be used to acquire leases; the remaining $65 million will go into a prefunding account. The securitization trust has approximately three months to acquire the rest of the collateral, subject to concentration limits.
The weighted average original term of leases has increased to 56 from 52 months for the prior deal. However the maximum original term is unchanged at 85 months. Seasoning has increased to nine months from five.
The trust will issue two senior tranches: $59 million of Class A1 money market notes with 78.25% credit enhancement and $131.8 million of Class A2 notes due July 2022 with 20.4% credit enhancement. The Class A2 notes are provisionally rated AAA by DBRS. There are also five tranches of notes with ratings ranging from AA to B.
In 2010, Amur and an investor group acquired a majority stake in the then Axis Capital; it rebranded the business in 2016. (The 2016 securitization was done under the Axis brand.) The company develops its vendor and direct customer relationships while transitioning away from broker origination channels. In recent years, it has focused on hard, business-essential assets with longer useful lives and higher collateral values and away from smaller retail-type services, according to DBRS.
Amur primarily originates non-cancellable finance leases with a minor portion of its portfolio originated in the form of true leases.
Since its founding, Amur has extended more than $2.1 billion in equipment leases and loans to over 33,000 customers.
The company's portfolio exposure to damage from Hurricane Florence to date has been "insignificant," the presale report states. Only one obligor in the statistical asset pool, representing the discounted contract balance of $92,800, had contacted it asking for one-month payment relief. Amur also confirmed that the equipment associated with such obligors had suffered minor damage, which is expected to be covered by insurance.
