Three U.S. container lease securitizations that are currently marketing will add $671 million to the total volumes for the asset class, which is already ahead of the pace set last year, according to Standard & Poor’s.
S&P has assigned ratings to the $215 million TAL International deal, $250 million Seaco deal and $206 million CLI Funding transaction; all backed by container lease revenues/residual cash flows.
Total year-to-date volume for the asset class is $3.2 billion from 12 deals compared to $2.6 billion from 10 transactions for all of 2012. “The year-to-date pace of container lease securitization is tracking above last year, bolstered by growth in global trade,” said S&P.
In 2010, according to industry statistics, the global demand for goods increased significantly compared with 2009, resulting in a 13% increase in container trade volume growth, said S&P. This trend continued in 2011 and 2012, with further growth of approximately 8% and 4%, respectively.
“To meet this demand, the marine cargo container lessors ramped up spending to add to their fleets, because shipping lines are increasingly gravitating toward leasing rather than owning marine cargo containers, as a cost-effective means for expanding or contracting their carrying capacity, especially following the 2009 downturn,” said S&P.
Leasing also provides more financial flexibility relative to the capital investment necessary to outfit a fleet.
This increased demand for leased containers has led to utilization levels upwards of 90%, compared with the low-80% range in 2009. The increase has been accompanied by higher lease rates. “Demand has moderated from peak utilization but it remains strong at around mid-90% for most lessors, and we expect it to remain close to current levels over the next several quarters,” said S&P.
The Seaco transaction dubbed Global SC Finance II SRL (Series 2013-2) has been assigned a preliminary rating of A’; and CLI Funding’s deal, Series 2013-3 has also been assigned a preliminary rating of A’. Deutsche Bank is structuring agent and lead underwriter on both deals.
TAL International will offer A’-rated class A notes and BBB’-rated class B notes. Normura Securities is the structuring agent on the deal.
