Enterprise Fleet Management is preparing its sixth securitization backed by vehicle fleet leases, for $600.1 million, according to a presale report from Standard and Poor's.
JPMorgan Chase, Bank of America Merrill Lynch, and RBC Capital Markets are leading the deal, which is expected to close Aug. 13.
The Series 2013-2 notes are backed by a special unit of beneficial interest in a pool of vehicle fleet leases orginated by Enterprise Fleet Management to small businesses diversified by industry, state, and lessee.
The transaction features three fixed-rate senior tranches. The $154 million senior-most A-1 notes are preliminarily rated 'A-1+' by S&P. The $446.1 combined A-2 and A-3 classes are rated 'AAA'.
It benefits from 9% initial hard credit support, which consists of overcollateralization of 7.8% of the initial pool balance and a cash reserve account of 1.2% of the initial pool balance.
A majority (94.7%) of the leases in the pool will be open-end contracts in which lessees are contractually responsible for any difference (shortfall) of the leased vehicle sale proceeds, upon the lease expiration, below the outstanding lease balance at that time, stated S&P.
S&P also noted several differences between this and the previous Series 2013-1 transaction, including: the total top 10 obligor concentrations increased slightly to 5.71% of the pool balance from 4.65%; the proportion of customers opting for maintenance coverage increased marginally to 38.91% of the pool balance from 37.15%; and the weighted average remaining term increased to 39 months from 37 months (which indicates a higher weighted average life for the transaction).
Additionally, the initial overcollateralization percentage increased slightly to 7.80% from 7.72%, reflecting the slightly higher proportion of closed-end residuals.
Enterprise Fleet Management, whose parent company is Enterprise Holdings, will service the notes itself.