MassMutual Asset Finance plans to issue a $728.3 million of bonds backed by equipment loans and leases, according to a Fitch Ratings report.

JP Morgan Securities is the lead underwriter.

The deal, MMAF Equipment Finance LLC 2014-A, will offer five class of ‘AAA’ rated notes, each structured with credit enhancement at 11%. The class A2 notes are due April 2017, the class A3 notes are due January 2019, the class A4 notes are due February 2022, the class A5 notes are due Decemebr 2025; and the class A6 notes are due March 2038.

The U.S. government is the largest obligor, representing 29.4% of the pool and its concentration is expected to rise to 46% by year-end 2014. As a result, Fitch said it may link the credit ratings to the U.S. government's sovereign rating as concentrations increase.

“With the larger U.S government obligor concentration, the overall credit quality of the pool, combined with the strength of other obligors, results in 2014-A having a stronger overall credit quality versus the prior pools securitized, with 87% investment grade-rated obligors backing the pool versus 73% in 2013-A,” the report states.

Fitch said the several of the government contracts have terms of 256 months, which drives the total weighted average original term to 145.5 months, up from 90−97 months the issuer’s 2013-A deal. The weighted average remaining term is 132.3 months in 2014-A, a significant jump from the 90.4 months in the earlier deal.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.