CIT Group is bringing its first securitization of equipment leases to market in over a year.
Credit Suisse is the lead placement agent.
The deal, dubbed CIT Equipment Collateral 2013-VT1, consists of five classes of fixed-rate notes, according to a presale report by Moody’s Investors Service: $192 million money market tranche rated P-1; $139 million, AAA-rated’ class due March 2016; a $131.9 million, AAA’ due July 2020, a $18.5 million, Aa1’-rated class due July 2020 and an $18.5 million, A1’-rated class due July 2020.
CIT and its affiliates have been sponsoring securitization transactions for more than 14 years and since 2002 have sponsored fourteen securitizations, according to Moody’s. This one is backed by 29,644 small-ticket equipment lease contracts with a statistical contract principal balance of $529,676,998.
As is CIT's previous deal issued in 2012, this one is backed by leases originated based on its vendor relationships with manufacturers and distributors of the equipment.
Moody’s expects cumulative net losses over the lifetime of the latest deal to be 2.75%, less than the 3.25% its projecting for the 2012 deal, due to significant improvement in the U.S. economy and reduced operational risk of CIT.
The credit enhancement available in the CITEC 2013-VT1 is also lower than that available in the CITEC 2012-VT1 transaction: intial hard credit enhancement available to the senior notes in this deal is 15.35% vs. 19.00% in the CITEC 2012-VT1.