After a shaky three-year period characterized by low issuance, corporate bankruptcies and consolidation, dubbed the perfect storm,' the equipment-least sector is ripe for a comeback, say market observers. Buoyed by strong demand for agricultural equipment, more experienced issuers and higher lease origination volumes in general, the sector is expected to see up to $10 billion in issuance this year, compared to $7.6 billion in 2004, and an even greater increase in the years to follow.
"All things are pointing positive in this sector from a macro perspective," said Fitch Ratings analyst John Bella. An increased demand for agricultural and construction equipment is driving the growth in mid-ticket portfolios - loans for equipment costing between $100,000 and $500,000. Other sources have said the rise in commodity prices may be spurring the demand for more agricultural and mining equipment.