As it treads into the finance industry, United Parcel Services could become a player in the securitization market down the line, industry sources said.
Via UPS Capital, the company's financial services arm (established in 1998), UPS has been building an equipment leasing business, although an official at the company said it has yet to gain significant volume.
Last week, however, UPS announced it would acquire First International Bancorp, already a frequent player in the private asset-backed securities market.
UPS's goal is to offer financing solutions to its corporate and small business clients, according to analysts following the company.
As for First International, the bank will no longer operate as a federally insured depository institution. The bank will sell off all its deposit accounts, but will bring approximately $1.2 billion in loans along with it to UPS.
First International has primarily securitized small business and commercial loans, according to Thomson Financial Securities Data. The bank hit the ABS market three times in 2000, securitizing approximately $130 million in loans, alternating between First Union and Prudential Securities as underwriters. First International has been privately placing its ABS off and on since 1993.
UPS expects to complete its acquisition of First International during the second quarter of this year.