Navitas Lease Corp. is marketing its second securitization of commercial equipment loans and leases, according to Moody’s Investors Service.
The $130.7 million Navitas Equipment Receivables LLC 2015-1 (NVTAS 2015-1) is backed by equipment purchased in industries such as restaurants, beauty shops, medical and physical fitness facilities, hotels and motels. The trust will issue six classes of fixed-rate notes; Moody’s expects to assign an A3’ rating to a $65.5 million senior tranche maturing in November 2018 and a Baa3’ rating to a $4.1 million subordinated tranche maturing in February 2019.
Bank of America Merrill Lynch is the lead underwriter.
Compared with Navitas’ previous transaction, completed in 2013, the latest transaction has a higher proportion of collateral backed by mid-ticket/heavy metal equipment, according to Moody’s. And unlike the previous deal, it does not include a “control party.” NVTAS 2013-1 was structured with Midland Loan Services acting as the control party.
Also, the 2015-1 transaction is full turbo but only until it builds to a target CE; NVTAS 2013-1 was full turbo for the life of the deal.
Among other rating concerns cited in the presale report is the fact that Navitas has a limited operating history; it was organized in 2008 and is privately owned by the management of Navitas and funds managed by Noro-Moseley Partners and Blue Mountain Capital.
As of December 31, 2014, their portfolio under management was approximately $182 million
Moody’s cumulative net loss expectation for the 2015-1 pool is 4.00%.