Though the year's first visible equipment deal priced in late March, the sector is seeing decent flow this quarter, already at close to $3 billion in the last two months, and nearly $5 billion year-to-date, thanks in part to a $1 billion deal from The CIT Group in early May.
Last week IKON Office Solutions brought a $633 million lease deal via Banc of America Securities. Though typically in the market twice a year, IKON only priced one term deal in 2001.
Meanwhile, Rothschild Inc. is reportedly putting the finishing touches on an inaugural transaction for a mid-ticket lender, possibly one of the only new issuers in the term market this year. The deal, said to be less than $100 million in size, will likely close in June.
Still in the tentative pipeline from the small ticket sector are repeat issuers Frontier Leasing Corp., Marlin Leasing, MircoFinancial, and Centerpoint Financial Services.
Frontier is looking at a late summer transaction in the $60 million range via West LB. Marlin, which has come annually since 1999, will likely bring a deal within the next few months. In the past, the company has gone with Deutsche Bank Securities as lead.
It's possibly Sky Financial will have a second deal this year, sources said. The dental equipment issuer already came to market once with a $150 million joint lead via Red Capital Markets and BB&T Capital Markets.
Great America Leasing and DVI Inc. have also already tapped the market this year. DVI generally comes twice, however, so expect another deal before year end.
In the large-ticket market, Deere & Co., manufacturer of agricultural equipment such as John Deere tractors, could be readying a deal. Deere amended its S-3 with the Securities & Exchange Commission last week, allowing the company to issue up to $3.5 billion off its shelf. The filing describes a senior/subordinate structure.
Caterpillar is also expected this year. The company last came to market in July 2001, its third transaction via Goldman Sachs, and has averaged one deal annually since 1994, generally in the $600 million range.
Case New Holland and Navistar have already come this year, for $1 billion and $500 million, respectively.
According to Barbara Havlicek, the agricultural deals have been performing well, and the sector may benefit from the newly-passed Farm Security and Rural Investment Act of 2002, which provides income subsidies to farmers.
"The farm bill will reduce the need for emergency farm assistance, which means that farmers' cash flow will be more certain, so I would expect to have continued good performance on the agricultural side," Havlicek said. "Construction has been hurt by the softening economy, however."
Lastly, the intermodal assets sector is expected to see less issuance this year, as the sector's biggest issuers - Triton Containers and Textainer Corp. - came in late 2001. Still in the works, however, is a $500 million range deal for Interpool, backed by equipment such as rail car chassis, sources said.