Commercial leasing company Linc Capital is expected to become a regular player in the equipment sector going forward, pricing last week a $225 million equipment lease deal that marks the company's first entrance into the asset-backed market since 1996.
The Chicago-based company priced its term deal in two parts in the 144A market. The largest portion of the 1.5-year bonds sold at 25 basis points above one-month Libor, while a smaller, triple-B-rated piece rung in at 205 basis points over Libor.
Prudential Securities led the sale, and Fleet Securities advised on the deal. Ambac provided a financial guaranty.
According to sources, Linc will continue a pattern of growth through acquisition and capital raising that includes regular trips to the asset-backed securities market.
Previously, the company had financed its lease collateral in private placement transactions, doing approximately $650 million in deals since the late 1980s. (A portion of Linc equipment collateral that went to Newcourt in 1996 and was then securitized is included in this total.)
Marion Silverman, a senior Linc executive, said the company expects to come to market at least once a year, but "perhaps twice."
Since its formation in 1975, Linc has provided approximately $1.5 billion in leases to more than 3,000 clients who are primarily focused on the equipment sector. The company's volume has included the acquisition of $325 million in lease portfolios and companies with lease receivables of over $300 million. The company also manages more than $500 million in lease portfolios for institutional investors.
Linc mainly leases to middle-market or emerging companies that concentrate in the high technology, telecommunications and healthcare fields. - SK