Wingspire Equipment Finance is preparing to sell $201.4 million in asset-backed bonds through the Wingspire Equipment Finance, 2024-1, trust, the sponsor's first securitization. This will be a 144a deal.
Based in Tustin, Calif., Wingspire Equipment Finance specializes in mid-to large-ticket equipment deals, and is majority owned by Wingspire Capital Holdings, a portfolio company of Blue Owl Capital Corp., according to Kroll Bond Rating Agency.
Wingspire will issue notes through five tranches of class A, B, C and D notes, according to Fitch Ratings, whose analysts also rated the deal. The most senior class, the A1 notes, has a legal final maturity date of Aug. 20, 2025, while the rest of the notes mature on Sept. 20, 2032, Fitch said. Asset Securitization Report's deal database estimates that the F1+ notes will yield 5.29% to investors. The subordinate notes, rated BBB/A from Fitch and KBRA, respectively, could pay 6.39%, the database said.
All the notes will be priced against the three-month, interpolated yield curve, according to the database. Credit enhancement comes from an overcollateralization level of 13.0% at closing, reaching a target of 18.0% through amortization, according to KBRA. The notes also benefit from excess spread and a reserve account funded with 1.00% of the cut-off date ASV, KBRA said.
Fitch assigns AAA to the A2 notes; AA to the B tranche; and A to the class C notes. KBRA says it assigned AA to the A2 notes; AA to the class B notes; A to the class C notes; and BBB to the D tranche.
In a positive credit indication, Fitch also notes that Wingspire's originations have experienced minimal defaults and losses since inception. KBRA says the company was founded in 2017. Since 2019, the portfolio has recorded five defaults—driven by bankruptcies—and each was resolved with a 100% recovery rate, the rating agency said.
The leased equipment accounts for 6.17% in residual value of the entire pool, on a discounted basis, Fitch said. Also, 0.79% of that segment is subject to residual risk, whereas the remaining 5.37% is backed by guarantees from the respective obligors, the rating agency said.
The 88 contracts, with an average balance of $2.6 million, are extended to borrowers from the manufacturing, healthcare and IT/telecom industries, accounting for 32.17%, 15.11% and 13.45%, respectively, Fitch said. Broken down by equipment type, Fitch says manufacturing, servers and IT and titled vehicles account for 35.9%, 12.85 and 9.8% of the portfolio.
