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SeaCube adds to mounting deal volume for marine cargo ABS

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Marine cargo shipping container leasing firms are once again docking into the securitization market.

Three transactions secured by shipping container collateral and lease-contract receivables have priced this month, and a fourth has launched this week – bringing potentially nearly $2.3 billion of new bonds into an ABS sector that had been dormant for more than a year.

According to ratings agency presale reports, Seacube Containers – the d/b/a of Container leasing International – is marketing $300 million in fixed-rate asset-backed notes via Bank of America Securities, secured by portfolio involving 274,349 units with a net book value of $1.24 billion.

That follows three previous deals – two issues from Triton Container Finance totaling nearly $1.68 billion and a $450 million deal from Textainer Equipment Management. The Textainer issuance that closed Aug. 4 was the first publicly traded shipping container ABS portfolio sold to investors since May 2019.

CLI Funding VI LLC Series 2020-1 has preliminary A ratings from S&P Global Ratings and Kroll Bond Rating Agency.

S&P noted that the container leasing market has ongoing “resiliency and stability despite the macroeconomic disruption caused by the COVID-19 pandemic,” that has disrupted global trading. Although stay-at-home orders in many countries in Asia caused cargo container dislocations in those ports, and demand for goods dried up in the U.S. and Europe, most containers are on long-term leases that do not affect utilization or lease rates in the short term.

Those rates “may not be as negatively affected in the near term because there is currently a shortage of available marine cargo containers in the industry, with lower rates of production and many marine cargo containers parked but inaccessible at storage depots,” according to S&P.

More than 64% of the containers in the ABS are refrigerated units that have historically experience more stable demand and higher utilization rates, according to S&P.

The SeaCube deal is the first for CLI since May 2019, in a prior $300 million 2019-1 Series issuance.

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Esoteric ABS Shipping container ABS SeaCube Containers LLC