GE Unit Brings Inaugural Equipment Issue
Total Securitization -- Institutional Investor News (September 22, 2003)
GE Capital's commercial equipment unit is planning to issue its debut securitization of equipment loans and leases, according to asset-backed market participants. They say the Stamford, Conn.,-based lender is in the market with a $377 million securitization backed by loans on commercial items such as construction and medical equipment, known as GE Commercial Equipment Finance 2003-1. Citigroup and Deutsche Bank are co-lead managers on the transaction, the bulk and four tranches of which carry triple-A ratings from the three major rating agencies, according to rival sell-siders. The transaction was priced last Friday morning, according to a syndicate official. The 0.34-year money market tranche was sold at one-month LIBOR less four basis points. The A-2 class was priced at seven over, the A-3 at nine over and the A-4 at 12 over the floating-rate benchmark. The A3/single-A rated subordinate class was priced at 43 basis points over. Marisasa Moretti, a spokeswoman for GE Capital's commercial equipment finance unit, did not return a call.
Irina Faynzilberg, a v.p. and senior analyst at Moody's Investors Service, says the underlying collateral is made up of fixed- and floating-rate debt. To accommodate for basis and interest rate risk, the deal includes interest-rate swaps. The unit had previously funded itself through the asset-backed commercial paper market. Price talk on the largest class, the $124 million two-year piece, is nine basis points over one-month LIBOR.