Tulsa-based Bank of Oklahoma, described as a growing issuer/underwriter with a flair for the esoteric, has no less than five asset-backed deals lined up for third quarter.
The bank, through its Dallas-based securitization subsidiary Bank of Oklahoma Securities Corp., plans to securitize collateral from the loans of heat pumps, government sales installment contracts, rent and food cash flows from college dormitories, and prime auto loans originated by small southwestern banks.
In addition, BOSC will finance the construction of a Texas Health and Human Services building through securitization.
The first deal expected to come to market will be from the bank's auto loan program, a $175 million offering with BOSC underwriting the deal.
The bank's auto lending operation is a pool financing for small auto paper obligors or lenders. The bank's own prime auto loans are pooled with the smaller banks' debt.
"We're trying to create a program for banks that do not issue enough paper to have their own securitizations," said Larry Williamson, principal of BOSC.
The smaller member banks that originate the loans submit applications to BOSC underwriters, who score the loans and give them a rate based on certain credit criteria. Then BOSC puts them into a pool that is securitized.
The bank is also gearing up a securitization of the revenue from rent and food from a dormitory at Texas A&M University. BOSC engineered a tax-exempt leveraged buyout of the facility three years ago, buying equity from a corporation that was running the dorm as a not-for-profit. BOSC then converted the facility into a for-profit venue. Williamson expects the size of the transaction to be $40 million, and said BOSC may underwrite the deal.
"What we want to do is take that tax exempt mortgage and securitize or sell participations to a grantor's trust in it, with rent and food part of the same transaction," he said.
BOSC also has another heat pump deal lined up, again structuring a transaction for Oklahoma Gas & Electric, a large utility that provides heat pumps to various clients in the state. Heat pump loans are bundled into a trust that securitizes them. An upcoming deal should look similar to BOSC's last securitization of approximately 6,000 heat pumps for $25 million.
At press time, Williamson was having discussions with a client who's negotiating with a local government to build a number of facilities in which the sales installment contracts would be securitized.
Though Williamson wouldn't name the players or a deal size, he said to look for a $13 million bricks and mortar- and state lease-backed deal that would help build the Texas Health and Human Services building. - SK
