Macquarie Equipment Finance (MEF) is in the market with its first equipment lease securitization deal. MEF is the mid-ticket equipment leasing subsidiary of Macquarie Bank Ltd. (MBL).
The $284.5 million equipment lease securitization dubbed Macquarie Equipment Funding Trust Series 2011-A is two triple-A rated tranches, which are rated by both Moody's Investors Service and Fitch Ratings.
The majority of the assets in MEFT 2011-A were originated directly by MEF, while a smaller portion was acquired from CIT Technologies Corp. when Macquarie Capital Finance Holdings (a unit of Macquarie Group) bought CIT Technologies’ entire equipment leasing business,
The 2011-A trust pool has assets that were purchased by MEF directly from a select group of unrelated financial institutions and banks that originated the leases, or from direct/indirect assignee of the originator. Although the CIT Technologies-acquired and indirect lease contracts were not originated by MEF, they were re-underwritten by MEF and receive the same quality of servicing as the direct originations.
The deal consists mostly of true leases extended to a largely corporate obligor base and secured by different types of equipment such as PC equipment (13.61%), medical equipment ( 11.95%) and disk storage equipment ( 11.17%).
MEF is also the named servicer for the MEFT 2011-A transaction. While MEF services virtually all of the contracts that it has originated or purchased in the 2011-A pool, a handful of purchased contracts will still be serviced by the originating lessor.
According to Moody's, there is a significant amount of exposure to end-of-lease equipment value in this transaction since the collateral value advanced against includes a consideration for the residual value assigned to the equipment under the lease contract.
In other deal news and as earlier reported by StructuredFinanceNews.com, Great AmericaLeasing Corp. is in the market with a small-ticket commercial equipment leasing transaction. Fitch, which released a presale report on the deal today, expects to rate $355.4 million of the transaction's notes. The transaction, called GALC 2011-1, is the tenth U.S. small-ticket equipment offering issued by GreatAmerica, according to Fitch. Proceeds from this deal will be used for general funding purposes.
Other ABS transactions currently in the market include Mercedes Benz's $750 million 144A auto lease offering and Ford Motor Co. 's $586 million dealer floorplan ABS.
According to a Bloomberg report, the Ford deal's top-rated $250 million portion that matures in 2.98 years might pay 60 basis points to 65 basis points over the benchmark swap rate. The report also said that the deal's $250 million floating-rate portion with the same maturity and rating might yield 65 basis points over one-month Libor.