Dext Capital is preparing to sponsor its second securitization this year of equipment loan and lease contracts on collateral composed mostly of primarily new enterprise technology and surgical equipment.
This time issuer Dext ABS 2025-2 includes a prefunding account with an amount of $65 million, or 15.0% of the collateral's total combined balance, according to S&P Global Ratings, which assessed the notes along with Moody's Ratings.
Legal final maturity dates start with Nov. 16, 2026 on the class A1 notes, rated P1/A1+ from Moody's and S&P, respectively. Further down the capital structure the notes have maturity dates ranging from April 17, 2028 on the A2 notes through Oct. 15, 2036 on the class D notes.
The manager on the current series is unclear, but Bank of America and SunTrust Robinson Humphrey Capital Markets were managers on the platforms last two notes.
The A1 through A3 tranches on the 144a tranches, have a total hard credit enhancement of 23.5%, according to Moody's. Credit enhancement includes overcollateralization, initially 7.00% of the initial pool balance, which will build to a target of 8.25%. A non-declining reserve account also includes an amount equal to 1.00% of the initial pool balance, which boosts credit to the notes, Moody's said.
S&P noted some other structural differences in this deal, compared with the series 2025-1 notes. Subordination levels for the class A notes, for instance, increased to 15.50%, up from 15.00% on the Dext 2025-1.
Also, estimated excess spread on an annual basis is about 1.22% on a pre-pricing basis, compared with 2.08% on the series 2025-1.
In terms of the collateral, contracts on enterprise technology equipment composed 20.1% of the collateral pool; technology accounted for 1.5% and surgical equipment contracts made up 10.9% of the pool, Moody's said.
The contracts have an average balance of $90,162, with Dext Capital as originator and servicer. GreatAmerica Portfolio Services Group is the backup servicer, Moody's said.
Although Dext Capital has a strong performance record, the servicer has a low durability and has a limited record as a servicer.
"Dext's limited historical performance introduces uncertainty related to both Dext's servicing operations and the future performance of the securitization portfolio," Moody's said.
Moody's assigns Aaa, Aa2, A2 and Baa3 to the A2 and A3, B, C and D notes, respectively.
