GreatAmerica closes $747.9M equipment finance securitisation
What's the deal? GreatAmerica, the largest family-owned commercial equipment finance company in the US, has closed US$483.9M asset-backed securitisation. The deal — its 28th term securitisation — is backed by a pool of equipment leases and loans spanning office imaging, light industrial and construction equipment, franchise financing, and other business-critical categories.
The securities were issued in multiple classes, with 93.4% of the bonds rated AAA by S&P and FitchDealroom has a profile for this one. Try Dealroom → — unchanged from the prior eleven transactions. The deal attracted 45 unique investors.
"Investors had plenty of choices in this market. The fact that they chose GreatAmerica says a lot about the quality of our business, our portfolio, and the consistency of our execution," said Martin Golobic, chief executive officer of GreatAmerica.
Why now? GreatAmerica has been active in the asset-backed securities (ABS) market for over 30 years, using securitisation as a core part of its funding strategy. The Cedar Rapids, Iowa-based company manages more than $3.8B in assets and has originated nearly $20B in financing since its founding in 1992.
The portfolio's broad borrower diversification — with limited concentration among individual obligors — likely helped the deal attract strong investor interest despite a competitive market for ABS issuance.
What could go wrong? Equipment finance securitisations depend on the underlying borrowers continuing to make payments. An economic downturn or sector-specific weakness — particularly in office imaging or construction — could pressure the portfolio's credit performance. Rising interest rates could also dampen demand for new equipment financing, affecting future origination volumes.
That said, GreatAmerica's consistent AAA ratings across a dozen consecutive transactions suggest the company has maintained disciplined underwriting standards.
The signal: With 28 term securitisations under its belt and nearly $20B in lifetime originations, GreatAmerica's ability to price US$484M deal with 93.4% AAA-rated tranches — unchanged across a dozen consecutive transactions — points to durable institutional demand for well-underwritten equipment finance paper. The 45 unique investors participating in a competitive ABS market suggest that diversified, real-asset-backed portfolios remain a magnet for capital, even as mid-market equipment lenders face headwinds from rising rates and cyclical uncertainty in sectors like construction and office imaging.
Read more: industryanalysts.com
