Direct Capital Corp. is planning a $163 million securitization of equipment loans and leases, according to a presale report published today by Standard & Poor’s.

The deal will be the Portsmouth, NH equipment finance company’s first securitization. Previously, it has relied primarily on a bank funding.

The deal, Direct Capital Funding IV LLC 2013-1, consists of one class of notes maturing in December 2017 and four classes of notes maturing in October 2019. S&P has assigned a preliminary ‘AA’ rating to the shorter-dated, Class A notes; an ‘AA-‘ rating to the Class B notes; an ‘A-‘ rating to the Class C; a ‘BBB’ rating to the Class D notes and a ‘BB’ rating to the class E notes.

The  A, B, C, D, and E notes benefit from credit support of 26%, 18%, 13.4%, 9.25%, and 6.3%, respectively.

S&P said the pool of loans and leases used as collateral is highly diversified by obligor, state, equipment type, vendor, and franchise.


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