Blue Owl Asset Leasing Fund is preparing to sponsor its first securitization bond deal, selling $367.3 million in asset-backed securities secured by a pool of equipment loans and leases extended to borrowers in the manufacturing, health care equipment and IT hardware sectors.
Fund Evergreen, formed three years ago, purchased all equipment leasing contracts from Atalaya Equipment Leasing Fund in January and is now listed as the deal's originator, according to Moody's Ratings.
The transaction, Blue Owl Asset Leasing Trust, 2024-1, will issue notes through five tranches of class A, B, C and D notes, Moody's said. Yields on the notes range from Asset Securitization Report's deal database range from 4.8% on the A1 notes, which received a P-1 rating 6.4% on the C class, which Moody's rated Baa3, according Moody's.
All notes are priced to the three-month Interpolated yield curve, the rating agency said.
Further enhancement credit ratings, Blue Own Asset Leasing also benefits from a reserve account representing 1% of the pool balance, overcollateralization, and a senior-subordinate repayment structure, Moody's said.
Total hard credit enhancement includes 44.0% on both A classes; 32% on the class B notes and 26% and 23%, respectively on classes C and D. Legal final maturities range from Oct. 15, 2025 to Dec. 15, 2031, Moody's said.
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Evergreen's investment committee has more than 20 years of experience, each, in equipment leasing as former Atalaya executives. This works in the deal's favor as a credit strength, according to Moody's.
Moody's assigns P1 to the class A1 notes; Aaa to the A2 notes; A2 to the class B notes and Baa3 and BA2 to classes C and D, respectively.
