The Dell Equipment Finance program is issuing $1 billion in equipment asset-backed securities (ABS), to be repaid from a pool of commercial leases and loans mainly on technology-related equipment and software licenses or services.
DEFT 2024-2 will sell notes through six tranches of classes A, B, C and D notes, according to Fitch Ratings. Asset Securitization Report's deal database notes that yields are expected to range from 4.75% on the A1 notes, (rated P1 and F1+ by Moody's Ratings and Fitch, respectively) to 5.35% on the class D notes (Baa1/BBB). All notes are slated to be priced against the three-month interpolated yield curve, according to the deal database.
All three of the class A tranches have a credit enhancement level of 12.50%, while classes B, C and D have credit enhancement levels of 10.5%, 8.1% and 5.5%, respectively.
Legal final maturities on the notes range from Oct. 22, 2025 through Feb. 24, 2031, according to Fitch.
The collateral pool, with 9,255 contracts, is the largest to come to market in about a year and a half, since the 2023-1 series, according to the deal database. The opposite is true for the average principal discount balance, which at $115,036 is the smallest since the 2023-1 series, Fitch said.
Leases to the services industry account for 43.9% of the pool balance, the largest share. Manufacturing, finance, insurance and real estate; transport communication, electric and public utilities; and public administration accounts for 17.5%, 13.2%, 9.6% and 1.7% of the pool, Fitch said.
The pool is fairly well diversified, with the largest obligor accounting for 4.91% of the pool balance and the top 10 obligors accounting for 30.1%. While the latter appears to be a high concentration, Fitch says the pool has a high concentration of investment-grade obligors, and the top 10 rated obligors have a weighted-average (WA) rating of about BBB, the company said.
Fitch assigns F1+ to the A1 notes; AAA to the A2 and A3 notes; AA to the class B notes; A to the class C notes and BBB to class D.
According to the deal database, Moody's assigns P1 to the A1 notes; Aaa to the A2 and A3 notes; Aa2 to the B notes; A1 to the C notes and Baa1 to the D notes.
