Encina Equipment Finance announced the pricing and closing of its first assetbacked securities transaction. The $258.4MM offering was backed by a diverse pool of equipment loans and leases to 43 obligors across a variety of industries.

EEF’s inaugural ABS transaction included six classes of notes rated by Kroll Bond Rating Agency and DBRS, and the ratings by both rating agencies ranged from AAA (sf) through BB (sf). The advance rate through BB (sf) was 90.75% of the securitization value of the underlying equipment loan and lease contracts. BofA Securities acted as the sole structuring agent and co-lead bookrunner, with support from Goldman Sachs as a co-lead bookrunner and Huntington Capital Markets as a co-lead manager.

The transaction was met with heavy demand upon its announcement, with aggregate initial orders exceeding $1B from 28 unique investors. Given the level of investor interest, pricing spreads were tightened significantly versus initial guidance, and the notes priced at a duration-weighted average yield of 1.27%.

“We are delighted to have closed our inaugural ABS transaction,” said Tom Davidson, EVP and CFO of EEF. “This transaction further expands and diversifies EEF’s sources of capital at a very competitive cost of funds. We are encouraged to see such strong participation from institutional investors in our first transaction and look forward to further developing those relationships over time.”

“BofA Securities did an outstanding job on this transaction, from the due diligence preparation, rating agency process, deal structuring, marketing and placement,” added Rick Matte, President and Chief Operating Officer of EEF. “In addition, I’d like to acknowledge Tom Davidson for his leadership and expertise on establishing a repeatable ABS platform and capability. Given a tight timeline, Tom and his team executed flawlessly and achieved a great result for EEF.”