TAL International Group plans to issue a $271.75 million container lease ABS deal, kicking off what is expected to be a busy year for the esoteric asset class.
The deal, TAL Advantage V LLC Series 2013-1, is backed by a portfolio that includes 61,991 containers, which are all currently leased, according to a Standard & Poor’s presale report. The issuer's fleet comprises 89% long-term leases, 4% finance leases, and 6% leases with purchase options.
S&P assigned a preliminary rating of ‘A’ to the class A notes and ‘BBB’ to the class B notes. Bank of America Merrill Lynch and Pierce, Fenner & Smith are co-lead managers on the deal. RBS Securities is co-manager on the deal.
Since 2000, more than $10 billion of container ABS has been issued in 31 transactions from 10 different issuers, according to figures reported by Barclays Capital in December. As of that distribution date, the outstanding balance of container ABS was $5.3 billion.
Container ABS offer diversification away from traditional consumer ABS, and offers investors good opportunity to earn yield, according to Barclays. Primary market activity picked up significantly in 2012, with $3.6 billion in volume from eight issuers, compared with $1.2 billion in new issuance from four shelves in 2011 and $400 million from a single issuer in 2010.