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Enterprise launches second corporate-fleet securitization of 2020

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Enterprise Fleet Management’s second securitization of leased vehicles to small- and medium-size corporates has higher levels of credit enhancement and is less concentrated to particular obligors than in recent deals.

The new $847.9 million Enterprise Fleet Financing 2020-2 is the second asset-backed transaction this year, and Enterprise’s 23rdoverall, featuring mostly open-ended leases of light-duty trucks, SUVs and passenger cars for small-business clients.

The capital stack features a $193 million money-market tranche (Class A-1), and two early triple-A rated term tranches of $550 million (Class A-2) and $104.9 million (Class A-3), as rated by Fitch Ratings and S&P Global Ratings.

The Class A-1 tranche has both agencies highest short-term ratings, as well.

According to presale reports, 97.8% of the 29,760 leases in the deal are open-end, meaning that lessees bear the residual risk at the end of the leases, which have average original terms of 42 months.

The contracts in the pool are split among 5,638 corporate obligors, which have average lease balances of $162,374 (most with multiple vehicles). The highest exposure to any one client is 0.72% of the pool size, lower than recent Enterprise deals as well as of peer averages of competitors Wheels, Chesapeake and ARI Fleet (ranging from 2.25% to 3.43%).

No contract in the Enterprise pool have received COVID-19 forbearance, according to presale reports.

Enterprise Fleet Management is a subsidiary of The Crawford Group, which also owns Enterprise Holdings, the nation’s third largest rental car firm.

The transaction will be the second corporate-fleet ABS deal to price this month, following Wheels Inc.'s $505 million transaction that closed Sept. 11.

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