In its second asset-backed securitization (ABS) deal, Redaptive Sustainability Services is turning to raising capital from a pool of equipment loans and leases that it primarily acquired from originators, or that it originated itself, according to analysts at Morningstar DBRS.
Redaptive Equipment Issuer, series 2026-1, is the sponsor's first deal backed by the equipment contracts, of which there are 47, and the deal is expected to close around August 11.
The class A notes, one of five tranches ranges from A through D, will issue $105.8 million, and all tranches have the same final schedule payment date, July 25, 2034.
Credit enhancements include initial overcollateralization of 12.10% of the aggregate securitization value as of the on the closing date, a 1.00% reserve account, and excess spread of 1.6% of the pool balance when the transaction closes, DBRS analysts said.
Redaptive's collateral pool, which had an average securitization value per contract of $3.3 million, shows high obligor concentrations, Morningstar DBRS said. The largest obligor, five largest and 10 largest obligors account for about 15.21%, 47.79% and 71.01% of the pool's aggregate securitization value as of the deal's initial cutoff date, June 30, 2026.
The underlying contracts, representing some 28 customers, had a weighted average (WA) term of 63 months, a WA yield of 7.48% and an aggregate discounted unguaranteed residual value of $17,707, DBRS said.
Energy, industrials, transportation, consumer and healthcare are the five largest obligor industries, representing 23.07%, 22.81%, 20.36%, 9.34% and 7.17%, respectively.
DBRS assigns ratings ranging from (P) AAA (sf) on the class A notes to (P) BB (sf) on the class D notes.
