Enterprise Fleet Management is planning its first fleet lease securitization of the year, according to ratings agency presale reports.
The deal includes a $193 million money market tranche with a provisional ‘F-1’ rating from Fitch Ratings. It also has two 5.5-year tranches, one for $394 million and one for $113.2 million, both of which are provisionally rated 'AAA.'
Bank of America Merrill Lynch is the lead underwriter.
Enterprise Financing Series 2013-1 is the sponsor’s fifth securitization offered under Rule 144A. It is ultimately backed payments on a pool of open-end and closed-end vehicle fleet lease contracts for cars, light-duty trucks and other vehicles.
Proceeds will be used for general funding.
Fitch notes in its presale report that the deal benefits form strong portfolio diversification, although the concentration of obiligors has increased slightly relative to Enterprise’s most recent deal. The top 20 obligors by lease balance represent 7.04%, compared with 7.41% in 2012-2.
The ratings agency said it conservatively assumed a 'B' rating for all obligors.
Residual risk is “minimal,” according to Fitch, since approximately 96% of the 2013-1 leases are open-end, meaning the lessees bear the risk that a vehicle's value at the end of the lease has been overestimated.