Direct Capital Corporation plans to issue a $181 million securitization of equipment lease backed notes.
The deal is the issuer’s second deal of 2013 and is called Direct Capital Funding IV LLC 2013-2.
Standard & Poor’s has assigned preliminary ratings to the senior and subordinate notes. The class A-2 notes are rated ‘AA’, the class B notes are rated ‘A’ and the class C notes are rated ‘BBB’. S&P will not rate the class A-1 notes.
JP Morgan is lead manager on the deal. It is expected to close on Oct.10.
Direct Capital Corp. was last in the market in February. S&P said that its latest deal closely resembles the 2013-1 issue. However the series 2013-2 pool’s weighted average FICO and Small Business Scoring Services scores have declined to 719 and 209 from the previous deal which scored 730 and 214, respectively.
In the latest deal, around 7% of the securitization pool includes franchise loans that are greater than $50,000. These larger franchise loans were not part of the 2013-1 securitization pool.
As of June 30, 2013, Direct Capital Corp.’s net investment in equipment loans and leases totaled $353.9 million, nearly a 30% increase over its Dec. 31, 2012 net investment, according to S&P.
The deal bring year to date equipment/fleet securitization volume to $12.6 billion from 22 transactions.