Marlin Business Services is considering a forward swap arrangement with its investment bank, Deutsche Bank Securities, to lock in the current rates while it preps its next securitization, executives said during Marlin's first-ever quarter-end conference call since going public in November.
The company is hoping to enter the market with its annual $250 million range portfolio of small-ticket equipment leases within the next two months. Marlin had discussed with its equity investors the possibility of an interest-rate lock for a 60-day period. The forward swap arrangement would allow the company to price off of today's benchmark rates, adding a bit more flexibility in timing its launch.
Also new, Marlin is "investigating" the possibility of structuring its next deal to a higher rating than its traditional single-A rated seniors, though - given the new focus on seller/servicer risk - rating agency officials have indicated that single-A may become a new ceiling for small-ticket issuers, barring a wrap.
The only unrated small-ticket issuer still active in securitization that has received a stand-alone triple-A is Great America Leasing, which last securitized in September 2003.
Marlin last tapped the market in June 2003 with a $220 million deal through Deutsche Bank. The fixed-rate, 1.57-year single-A class priced at 173 basis points over EDSF.
Deutsche Bank has underwritten most of Marlin's visible deals, save the company's first deal in 1999 via Credit Suisse First Boston, several months before that team of bankers moved to Deutsche Bank in mid-2000.
The equipment market has been nearly void of small-ticket deals this year, with just one deal from The CIT Group in March.
Copyright 2004 Thomson Media Inc. All Rights Reserved.