Engs Commercial Finance, a specialty lender that finances the acquisition of trucks and trailer by small and medium-sized businesses, is making its second trip to the securitization market.
The $198 million ECF Trust 2016-1 will issue four tranches of fixed-rate notes with provisional ratings from DBRS, including $36 million of money market notes, $134.97 million of notes provisionally rated AAA, $10.95 million of notes rated AA, $8.97 million of notes rated A, and $7.69 million of notes rated BBB.
While ECF provides both loans and leases, the collateral pool for this transaction is represented exclusively by loans. It currently includes 2,149 loan contracts with an aggregate balance of approximately $174.73 million. The average balance is $81,307, and the average equipment cost was $99,649. The receivables have a weighted-average original term of 60.51 months and were seasoned by approximately five months. The weighted-average annual percentage rate is 9.61%.
The transaction contains a three-month prefunding period, during which ECF will originate another $30 million in receivables.
ECF will act as the initial servicer of the receivables. Wells Fargo Bank is the backup servicer.
ECF, headquartered in Lisle, Illinois, is majority owned by Aquiline. Its predecessor, Engs Motor Truck, was founded in 1946 by the Engs family and started financing trucks in 1952. In 2012, Engs and its $103 million portfolio were acquired by the current senior executive team and a private equity investor. Aquiline acquired the majority stake in the company in February 2015.
The company first tapped the securitization market in August 2015.