Aegon NV's recent sale of Transamerica Maritime Containers - a prominent maritime container lessor - could point to a new issuer in intermodal ABS, sources said.
The company was recently acquired by New York-based private equity firm the Jordan Company to the tune of $1.2 billion. Jordan has created TAL International Group to control Transamerica Maritime. In addition to the funds managed by Jordan, investors include London-based private equity firm Klesch & Company and TMC's senior management team. Officials at Transamerica said the decision to securitize would rest with the Jordon. Phone calls to Jordan seeking comment were not returned as of press time.
The sale is viewed as positive for Transamerica, and is seen by some within the industry as the start of a new era. "It is very positive for TMC. [The company] had been parked for a year as Aegon was trying to sell it. Under new management, there appears to be some renewed vigor," a source familiar with the situation said.
To date, Transamerica has never securitized as a form of financing. Volume in intermodal ABS backed by shipping containers is at roughly $527.6 million during the most recent 12-month period. The pair of offerings issued from GE SeaCo and Triton Container, the dominant issuers in the sector. Wachovia Securities acted as sole lead on both transactions. Both were met with a healthy appetite from investors and priced with guidance. The $250 million in Ambac-insured triple-A-rated notes in the GE SeaCo transaction cleared at 30 points over one-month Libor.
Currently, TAL International Group accounts for 10% of shipping container volume by 20-foot equivalent units (TEUs), according to research from Wachovia. By comparison, Triton accounts for 14% of the market in TEU, while GE SeaCo makes up 10%.
TMC's strategy has been similar to GE SeaCo's, according to analysts at Wachovia. "It has reduced its total fleet size over the past four years to 900,000 TEUs in mid-2004, from 1.2 million TEUs in 2000, while maintaining a relatively high exposure to dry-freight specials and reefers . . . the highest concentration in these types next to GE SeaCo out of the top 10 lessors," analysts wrote in a report.
Analysts noted that although Transamerica's fleet is relatively old - as most of it dates back to their acquisitions of Tiphook Container Renal and TransOcean in the mid-1990s - a recent run-up in newly built container prices stands to benefit the industry as a whole. New box production has been slowed this year by a shortage in steel, which has pushed prices of new containers to $2,000 from the $1,350 seen in the fourth quarter of 2003 for the 20-foot standard. "The effect of restrained supply growth has been record utilization rates of around 95% and a 55% increase in long-term lease rates," the Wachovia report found.
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