Equipment lease-backed industry veterans John Dale and David D'Antonio recently partnered to form Diversity Capital LLC., a lease-backed finance consulting firm based out of New Jersey.
"Recently, within the last couple of weeks, we've been awarded our first asset-backed deal," Dale said.
Diversity's first deal, scheduled to close at the end of March, is worth $50 million and, accordingly, will be backed by equipment leases. Though neither Dale nor D'Antonio would disclose the name of the issuer, Dale did say, "It's a small ticket leasing company in the Midwest-a private company, and generally they have a leasing facility with someone,' and they also have done a number of private deals in the past."
Dale and D'Antonio were colleagues at CoreState Bank before it was acquired by First Union Capital Markets two years ago.
D'Antonio had been with CoreState since 1985, where he managed the lease finance group, overseeing domestic and international lending to leasing companies.
"I was responsible for all lending activities including limited recourse purchases, credit lines, subordinated debt placements, and anything to do with leasing companies," D'Antonio said. He was a senior vice president when he left.
Since leaving First Union last May, D'Antiono has worked as a consultant.
Dale was managing director of the asset-backed group at CoreState when he left.
"I've been kicking around the asset-backed world since '86, right about that time," Dale said. He was brought to CoreState in 1994 to launch its ABS efforts, which was primarily focussed on privately placed equipment lease-backed deals.
Together, D'Antonio and Dale established CenterSquare, CoreState's equipment lease-backed conduit, which was perpetually pooling the assets of between 15 and 20 companies.
When Dale left last May, CenterSquare had roughly $1 billion in commitments and $500 million in outstandings.
Most recently, Dale was the chief financial officer at Fidelity Leasing, which he left a month ago to join Diversity.
Scott Gates has also recently joined Diversity as a limited partner. Gates was a vice president and worked as a relationship manager in the asset-backed group at CoreState.
Diversity is targeting the private placement, equipment lease receivables market, D'Antonio said.
"Our focus is going to be the private placements, where we don't bump into First Union or CIBC, where we could do a $30 million or $75 million placement, where we could do it quietly, and not get too many competitors in there," D'Antonio said.
"We've been finding that a lot of these emerging companies are entrepreneurial, just like in the mortgage world, and they're thinly capitalized and they need sub-debt, they need limited recourse type-debt, things that look like asset-backed but they're not really - they're not rated," Dale said. "We can do that. So we're going to try to go around and pick little deals like that, where we can make 50 basis points, and make an impact."
As for other projects in the works, "We're on retainer for a couple of firms," said D'Antonio.
Diversity is currently negotiating with a large provider leasing company, to be retained and advisor for the company's commercial paper conduit facility.
"They're negotiating with a large bank to renew and increase its credit line to $250 million," D'Antonio said. "We've been retained by them momentarily to act as their advisor because they really don't have a CFO."
At press time, Diversity was set to launch a press release and its web site, www.divcapital.com, last Friday.