Deal Scan: Dell, Ascentium Launch Equipment ABS
April 20, 2017
Dell, Ascentium Launch Equipment ABS: Dell Financial Services’ $996.58 million deal is backed by leases and loans on Dell and (for the first time) EMC branded equipment. It’s also Dell’s first deal to be rated by Fitch Ratings, which assigned an AAA to senior notes benefitting from 16.9% credit enhancement. Bank of America Merrill Lynch and Wells Fargo are co-lead managers.
Ascentium’s $235.6 million deal is backed by leases on small and mid-sized ticket equipment. (Medical equipment represents the largest exposure at roughly 25%.) Kroll Bond Rating agency expects to assign AAA ratings to three tranches of senior notes benefitting from 22.5% credit enhancement. So far, the sponsor has only acquired $226.1 million of the collateral, it has 90 days after closing to acquire the remaining $25.2 million.
NextGear Preps Floorplan Deal: NextGear Capital’s sixth securitization, NFMOT 2017-1, is backed by lines of credit extended to independent auto dealerships to finance their inventories. Diversified products include recreational vehicles, marine equipment, powersports and heavy-duty trucks. Four tranches of notes will be issued in the $437.35 million transaction, but they have yet to be sized, per DBRS, which expects to assign ratings ranging from AAA to A.
CPS Closes on $225M Auto ABS: Consumer Portfolio Services closed on $225.17 million auto loan ABS, its second term securitization this year. The senior tranche, which has a weighted average life of 0.71 years, rated triple-A by Standard & Poor’s and Kroll Bond Rating Agency, pay interest of 1.75% and were priced at 99.99332 of face value. The transaction uses a pre-funding structure, in which CPS sold approximately $145.7 million of receivables today and plans to sell approximately $84.3 million of additional receivables during May 2017.
CLO Refis: Two existing collaterlized loan obligations were refinanced to both lower interest rate and extend term (meaning they likely triggered risk retention requirement): Neuberger Berman CLO XVII Ltd and Octagon Investment Partners XIV.
Four others took advantage of a one-time exemption allowing CLOs issued prior to December 2014 to reset their interest rates without triggering the need for the manager to retain 5% of the economic risk of the deal: BNPP IP CLO 2014-1, TICP CLO II Ltd, Canyon Capital CLO 2014-2, and Hildene CLO III.