Enterprise is prepping $650.1 million of bond backed by auto fleet leases, according to Fitch Ratings.

Enterprise Fleet Financing, LLC, Series 2015-2 will issue a $165 million tranche of money market notes and two tranches of notes with a preliminary ‘AAA’ rating from Fitch: a $385 million tranche and a $110 million tranche. All three tranches benefit from credit enhancement of 8.65%.

JP Morgan Securities is the underwriter.

The notes will ultimately be backed by payments on a pool of open-end and closed-end vehicle fleet lease contracts for cars, light-duty trucks and other vehicles originated and serviced by Enterprise Fleet Management.

Although the vast majority of the collateral is unrated, EFM’s portfolio has experienced minimal delinquencies and net losses. In its analysis, Fitch assumed a ‘B’ rating for unrated obligors

Among the deals strength’s according to Fitch, the obligor and industry concentrations of the leases are minimal. The single most concentrated obligor represents 0.66% of the pool, while the top industry — oil and gas — represents only approximately 11.2%.

However, consistent with prior transactions, there is a large concentration of light and medium duty trucks, which comprise approximately 83% of the pool

There is also a low risk that the vehicles will be worth less than expected when they come off lease. That’s because approximately 97% of the 2015-2 leases are open-end leases, meaning the lessees bear the residual risk. The remaining 3% are closed-end leases, under which the trust will bear the wholesale market risk.

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