Though two months later than anticipated, DVI Inc. expects to price $250 million in asset-backed bonds backed by medical equipment leases later this week.
The deal has a new wrinkle in structure, and comes on the heels of a spike in originations and earnings, as well as a $100 million addition to the company's shelf filing which should cover the company's ABS offerings for the year.
Kevin Sweeney, securitization director at the company, said DVI was late in getting its shelf launched because of displeasing market environs and, more recently, bottlenecks at the SEC.
The Doylestown, Pa.-based company increased its shelf filing size to $600 million from $500 million after domestic loan originations surged 71% to $170.3 million in the company's fiscal third quarter ended March 31, versus year-ago figures. The company also posted a 47% rise in earnings to $4.9 million, compared with a year ago.
DVI will sell the bonds via Prudential Securities with Lehman Brothers, acting as co-manager. DVI rotates underwriting privileges between the two investment banks, Sweeney said.
Structure of the deal will differ from past DVI transactions with this week's offering featuring additional one-year and three-year senior classes. Typically, past structures contained three senior notes: a money market piece, a two-year chunk, and a longer bond.
DVI is a semiannual issuer, and Sweeney said that though his company has scheduled for November its second issuance of the year, timing will remain flexible in the face of Y2K worries and market conditions.
Separately, DVI last week hired Philip C. Jackson as vice president of banking and finance, responsible for developing domestic funding sources for DVI, while working closely with the company's treasury and business units. - SK