Equipment leasing investment company ATEL Capital Group is prepping its next securitization, approximately $150 million worth of receivables placed directly into one or more commercial paper conduits.
This will be ATEL's third such securitization, according to Pari Choksi, the company's chief financial and chief operating officer. Although the ABCP market is more feasible at present, ATEL will continue to consider the term market, and could bring a deal down the line.
"We've found that $150 million may be large enough to do a term deal, but we've found it more economical to go through the conduit market," Choksi said.
Via its line of ATEL Capital Equipment Funds (most recent No. IX), the company raises equity in the public markets, which it uses to acquire equipment. Atel then leases the equipment out and builds its portfolio of receivables, eventually securitizing.
ATEL specializes in low technology equipment, such as manufacturing, transportation, containers, railcars, and other operating assets that it deems high quality and with sustained residual values.
According to Choksi, 75% of the leases ATEL originates are of investment-grade credit. Over the last 20 years, total losses in ATEL's portfolio, net-over-recovery, have been approximately 1%.
San Francisco-based ATEL uses securitization as an exit strategy, continually selling its amortizing assets into the facility.
Meanwhile, Iowa-based Great-America Leasing Corp. is readying its next deal, a $200 million to $250 million equipment leasing ABS via First Union Securities. According to market sources, the deal is slated for November.
In an S-1 filing with the Securities & Exchange Commission, the company described a senior subordinate structure with four A-class notes, and one B-class.
Further C-class and D-class notes will be structured but not offered as part of the public sale, according to the filing. GreatAmerica was last in the market in June 2000, with a $235 million deal also led by First Union, which was the company's first public transaction.
The company did not return phone calls as of press time. GreatAmerica specializes in small ticket leasing.