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HP Enterprise launches first-ever commercial lease ABS

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The captive finance subsidiary of Hewlett Packard Enterprise Co. (HPE) has launched a first-time commercial equipment loan/lease securitization.

HPEFS 2019-1 is the debut $807 million offering sponsored by Hewlett-Packard Financial Services Co. (HPEFS), in an asset-backed offering backed by business leases and loans that are financing small-ticket PC, networking and mobility equipment for both large and small businesses.

HPEFS is the wholly owned by financial services of HPE, which was formed out of the 2015 spinoff of the commercial enterprise business that had been divested by the PC company HP Inc.

Moody’s Investors Service and S&P Global Ratings have each assigned preliminary ratings to the transaction. The three senior tranches include a $275.64 million Class A-2 tranche and a $100 million Class A-3 tranche with triple-A ratings, plus a $243.73 million Class A-1 money-market notes with each agency’s top short-term rating: an early A-1+ from S&P and a provisional P-1 from Moody’s.

Hewlett-Packard Financial Services is also marketing three subordinate note tranches: $53.3 million in Class B notes rated Aa2 by Moody’s and AA by S&P; a $56.49 million Class C notes rated A1/A; and a $33.49 million Class D tranche rated Baa1/BBB.

The notes benefit from 6.5% credit enhancement.

The collateral pool consists of 9,128 contracts to 2,872 obligors and 3,076 end users, with the top 10 users representing 29.6% of the initial aggregate balance of the contracts. Five of those 10 borrowers are investment-grade firms, according to presale reports. Nearly 30% of the contracts are concentrated in California.

The pool consists of leases and loans for notebook computers, PCs, prints and graphics, storage, networking and 3D/mobility equipment.

HPEFS, headquartered in Berkeley Heights, N.J., finances commercial equipment valued at $100 to $36,000.

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Equipment ABS