Dong Fang International Asset Management is marketing a $150 million container finance securitization, the issuer’s second deal ever.
BNP Paribas is the structuring agent and initial purchaser of the bonds. The issuer’s first ever container deal sized at $200 million, was completed in 2013.
Standard & Poor’s was hired to rate the deal. The rating agency expects to rate $35 million of class A-1 notes and $124 million of class A-2 notes, A’.
The notes are backed by a $194 million portfolio of 72,615 containers. Dong Fang has the right to the lease revenues from the portfolio and any residual cash flows from container sales.
Among the transaction's strength, S&P lists the relatively young age of the marine cargo containers included in the portfolio that, by net book value (NBV), average approximately 2.79 years. The vast majority of the leases are long term and direct finance leases, which protects the lease from the risk of rate reduction during a downturn.
Dong Fang is a relative newcomer to international container leasing. The company only began competing on a global scale in 2007, it previouse only leased to China Shipping Container Lines.
However the portfolio composition of its deals shows that the group is rapidly expanding. S&P said that the share of China Shipping Container Lines leases in Dong Fang's portfolio declined to 70% in 2009, 32% in 2012, 23% in May 2013, and 17% in September 2014 from 100% before 1997.
China Shipping Container Lines Co. is the third-largest lessee for series 2014-1, whereas it was the largest lessee in the Dong Fang Container Finance (SPV) Ltd. 2013-1 portfolio.
