Coming on the heels of churning out $2.5 billion in asset-backed securities backed by manufactured housing and home-equity loans, Green Tree Financial Corp. is gearing up for a sale of equipment lease bonds from its Lease Finance program.
Debt from the program has only been securitized twice, once after its inception in December 1997, and then in December 1998. The upcoming deal will total $336 million, and sources say both Lehman Brothers and Merrill Lynch & Co. will have a role in managing the sale.
The leases contained in the upcoming offering will mostly come from data processing machines, telecommunications equipment and other office machines, with the bulk of the leases originated in California and New York, as well as in Florida, Texas and New Jersey.
Standard & Poor's Ratings Group and Fitch IBCA have rated class A-1 as A-1+/F-1+; class A-2 is AAA/AAA; class A-3 is AAA/AAA; class A-4 is AAA/AAA; class B is A/A; and class C is BBB/BBB.
The senior notes in the deal and the subordinate notes will be led by different underwriters. A shelf registration, the company's first for this program according to one source, allows for multiple underwriters on the senior bonds, but reserves a spot for a single manager to lead the B and C tranches to market.
Though both previous lease finance deals from Green Tree priced in December, sources say a deal is expected earlier this year - perhaps late this quarter or early next quarter - because like most issuers, the company wants to avoid any concerns or negative perceptions investors might have about the Y2K issue.
Green Tree currently has $15.4 billion registered in SEC filings for its home equity and manufactured housing programs (the total includes leftovers from previous filings).
Apart from the HEL, manufactured housing and lease finance programs, the company also has a recreational "mixed-bag" equipment trust that issued bonds quarterly until recently. This year, Green Tree has issued only one deal from that program: an offering that landed in June for $600 million.