Capteris Equipment Finance is preparing to sell $436.9 million in asset-backed securities (ABS) to investors backed by a pool of 216 commercial equipment loan and lease contracts and related assets from 57 obligors in a range of industries, some heavy.
The series 2026-1, which is Capteris' second 144A term securitization, will issue six tranches of notes, classes A through E. They have maturity dates of March 22, 2027 on the class A notes and Sept. 20, 2033 on classes A2, through E, according to Morningstar DBRS.
Classes A1 and A2 will issue the bulk of notes, with $56.3 million and $271.4 million, respectively, DBRS said.
Slated to close on March 24, the deal has a stressed cumulative net loss rates of 25.14%, 22,13%, 18.23%, 11.35% and 7.75%, which correspond to the (P) AAA (sf), (P) AA (high) (sf), (P) A (high) (sf), (P) BBB (high) (sf), and (P) BB (high) (sf) ratings levels, the rating agency said.
DBRS finds that both senior tranches, A1 and A2, benefit from initial credit enhancement levels of 32.00%. For the rest of the deal, classes B, C, D and E benefit from initial credit enhancement levels of 24.75%, 19.25%, 14.25% and 9.00%.
To keep the notes liquid, structural enhancements include subordination, initial overcollateralization of 8.00%, which can increase to a target of 12.00% of the note value; a cash reserve funded at 1.00% of the initial securitized pool balance, and which can be replenished, plus available excess spread.
On a weighted average basis, the collateral pool has a yield of 8.66%, DBRS said.
Founded in 2022, Capteris has funded more than $1.1 billion in equipment lease volume to date and has more than $850 million in assets under management, the rating agency said.
While the deal has ample credit enhancement, DBRA noted, the pool has high concentrations of obligors, relatively. The top, five largest and 10 largest obligors account for about 8.18%, 30.28% and 49.14% of Capteris' aggregate securitization value as of the cut-off date.
Data processing, hosting and related services account for the largest industries represented, at 10.83% of the aggregate securitization value at closing. Other represented industries include landscaping services (7.14%); motor vehicle supplies and new parts merchant wholesalers (6.34%); construction for power and communication lines and related structures (5.84%); and construction, mining and forestry machinery and equipment rental and leasing (4.39%).
