A weakened housing market might have changed the composition of the underlying collateral in CNH Capital America's $1.2 billion offering last week, but pricing appeared unscathed.
Regular ABS issuer CNH Capital America, an equipment-financing provider, has come to market at least 15 times before. New and used retail agricultural and construction equipment leased to retail companies and consumers secured the transaction. On this go- around, a weakened housing market contributed to the reduction of originations on leases for construction equipment and reduced the percentage of construction equipment leases. Leases on construction equipment represented 28.7% of the underlying collateral in last week's deal, down from 32.9% in a previous securitization, according to Fitch Ratings. Ultimately, the deal has a 70.6% concentration of agricultural equipment leases securing the notes. Fitch says this is just fine, because the agricultural equipment has historically performed better than construction equipment.