Dext Capital is preparing to sell $518.4 million in asset-backed securities (ABS) on the capital markets, to be repaid from a stream of equipment loan and lease contracts on surgical and medical equipment, and enterprise technology.
The transaction, Dext ABS 2025-1, will sell notes through about six tranches of class A, B, C, and D notes, according to a Moody's Ratings pre-sale report. All the senior tranches, classes A1 through A3, and each tranche benefits from total hard credit enhancement representing 21.5% of their respective balances.
Notes in the Rule 144A transaction benefits from a non-declining reserve representing 1.0% of the initial pool, and initial overcollateralization accounts for 5.5% of the initial pool balance, Moody's said. The notes also benefit from a cash reserve account, according to Moody's.
Dext Capital is composed of 4,556 contracts, which have an average contract balance of $113,785, the rating agency said. The pool is diversified, with its top obligor accounting for 3.2% of the pool balance, and the top 10 obligors account for 14.1%, Moody's said. In addition to sponsoring the deal, Dext Capital is the servicer, while GreatAmerica Portfolio Services Group is the backup servicer.
Loans make up most of the pool, 64.4%, and they are likely to finance new equipment, since the latter makes up virtually the entire pool, at 97.4%. Beyond that the assets have some diversification by equipment type. Surgical, medical technology, enterprise technology, technology and wellness equipment account for 16.1%, 15.8%, 13.6%, 7.6% and 5.2% of the pool, respectively.
The pool also appears to be geographically diverse, with California, Texas and Florida accounting for 14.6%, 7.8% and 7.6%, respectively.
Moody's assigns P-1 to the A1 notes; Aaa to the A2 and A3 notes; Aa1 to the class B notes; A1 to the class C notes and Baa2 to the class D notes.
S&P Global Ratings assigned A1+ 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 the class D notes.
