Dell Equipment Finance is sponsoring a $1 billion securitization of true leases, finance leases and loans extended to obligors in the services, manufacturing and finance, insurance and real estate industries.
The Dell Equipment Finance Trust, 2025-1, will issue class A, B, C and D notes through six tranches, according to rating agencies. Notes have maturities including May 22, 2026 on the A1 notes; July 22, 2027 on the A2 notes; and Feb. 24, 2031 on classes A3 through C, according to Moody's Ratings and Fitch Ratings.
The A1, A2 and A3 notes benefit from total hard credit enhancements representing 12.4% of the note balance. Classes B, C and D receive benefit from total hard credit enhancement totaling 10.8%, 8.6% and 5.3%, respectively, according to Moody's.
Among the deal's structural strengths, DEFT 2025-1 also includes a non-declining reserve account representing 1.0% of the pool balance. There is also over-collateralization of 4.30% of the initial pool balance, while subordination for classes A, B and C amounts to 7.1%, 5.5% and 3.3%, respectively.
RBC Capital Markets,
The deal will trap excess spread starting at 2.5% per annum, until overcollateralization reaches its target of 6.4% of the outstanding pool balance and will not fall beneath the floor of 4.3% of the initial pool balance.
Fitch notes that the largest obligor represents 4.9% of the pool, the top 10 obligors account for 32.1% of the transaction's pool balance, and 44.7% of the top 20 obligors.
Fitch also noted that DEFT 2025-1's collateral pool is composed of 8,914 contracts, which have an average discounted balance $121,158. The three assets in the pool—true leases, finance leases and loans--account for 31.7%, 33.3% and 34.9%, respectively, Fitch said.
On a weighted average (WA) basis, the assets have a remaining term of 33 months, Fitch said.
Fitch assigns F1+ to the A1 notes; AAA to the A2 and A3 notes; AA to the B class; A to the C class and BBB to the D tranche. Moody's assigned P1 to the A1 notes; Aaa to the A2 and A3 notes; Aa2 to the class B notes; Aa3 to the class C notes; and A3 to the class Ds.
