GreatAmerica Financial Services plans a $378million equipment lease ABS transaction, backed by small ticket technology equipment.
Fitch Ratings assigned preliminary ratings to the deal, series 2013-1. The capital structured includes ‘AAA’ rated class A notes; ‘AA’ rated Class B notes and ‘A’ rated class C notes. Bank of America Merrill Lynch is lead manager on the deal.
The notes will be backed by small-ticket commercial equipment leases/loans originated by GreatAmerica Financial Services. Proceeds from this transaction will be used for general funding purposes.
According to the Fitch presale report, the notes all benefit from a reserve account that will be funded at 1.50% of the initial aggregate discounted contract balance (ADCB) and overcollateralization (OC) of 5.50%. Class A and B notes benefit from subordination of 6.75% and 3.10%, respectively.
The issue is the second equipment leasing deal for 2013 and brings year to date volumes in the space to $541million. Analysts at Standard & Poor’s said they project about $15 billion in U.S. equipment lease ABS issuance in 2013, similar to the 2012 total.
