Rothschild recently closed two concurrent privately placed securitizations for micro-ticket equipment lease concern MicroFinancial, one of which was similar to a net interest margin (NIM) securitization.

The transactions, which priced just before the events of Sept. 11, closed without widening from original levels, a source at Rothschild said.

The first deal, which is the third in a series (2001-3), consisted of a $39 million A-class wrapped to a triple-A by Ambac.

Into a separate trust, Rothschild placed the overcollateralization from that deal, plus the O/C from series 2000-1 and 2000-2 and seasoned collateral from a third deal -- BLT 1998-1 (which had been called). The $13 million B class, which has characteristics of a NIM (monetization of excess spread), was rated Baa2' by Moody's Investors Service.

Ambac had wrapped the two previous MFI series, while MBIA was the monoline of BLT 1998. Rothschild was sole lead and placed the deal with three investors.

MicroFinacial, based in Waltham, MA, specializes in equipment financing in the $500 to $10,000 range, according to company statements.

Elsewhere in equipment ABS

Meanwhile, several more equipment securitizations are set for October and further into the fourth quarter, including one from a banking institution and at least one other true private placement, according to market sources.

In fact, some market analysts are predicting a pickup in true private ABS, as investors in the 144A and public markets become less willing to invest in off-the-run names and esoteric classes.

This has traditionally been the case in times of economic stress, seen in 1998 following Russia's default and the liquidity crisis, when that market had its best year in all the 1990's, at $12 billion.

To access the private market, issuers need to pay up in spread, more so in a rocky economic environment. According to one banker, spreads in true private deals could widen as much as 100 basis points from normal levels, but this is offset by lower interest rates. Thus, to issuers, the absolute cost of funding might seem cheap, if they can get their deals done.

"On the other hand, everybody's origination is down," said Warren Kornfeld, of the securitization group at Chicago-based William Blair & Co. "Everybody's tightened up credit, whether it's in auto, mortgages or equipment leasing. Some of them, if they can, they're just pushing [securitization] off."

Said one credit analyst following the equipment ABS market, "I think it's going to be challenging for small companies to come to market. I think some of the small companies might go to the conduit market."

William Blair, for example, has as many as three private deals this fall that it hopes to bring either to the traditional private market, the conduit market, or a combination of the two.

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