SLR pulls in over US$1bn of orders for US$252m equipment ABS

SLR Equipment Finance has closed a US$252m asset-backed securitisation after attracting more than US$1bn of investor demand, giving the specialist equipment lender another capital-markets funding channel for a portfolio backed by essential-use commercial assets.

The SLREF 2026-1 transaction is SLR Equipment Finance’s fourth ABS and comprises six classes of notes. All six were oversubscribed, with 47 orders from 30 separate investors. The company said the demand contributed to competitive all-in pricing, although final tranche spreads were not disclosed in the public closing announcement.

BofA Securities acted as structuring lead and lead bookrunner, with Truist Bank as active joint bookrunner. The transaction is the first completed under SLR Equipment Finance’s new ticker and management structure.

The underlying collateral is diversified across equipment loans and leases. Morningstar DBRS reported before closing that approximately 77.95% of the pool consisted of loans and finance leases, with the remainder represented by true leases. Technology equipment was the largest broad asset category at 16.66% of the pool, followed by food-processing lines at 10.76%, trucks at 8.59% and cranes at 8.47%.

The structure contains several layers designed to absorb credit deterioration before senior noteholders incur losses. KBRA said credit enhancement includes excess spread, a reserve account, overcollateralisation and subordination. Overcollateralisation targets 13% of the current pool balance, subject to an 8% floor based on the initial pool, while the reserve account is funded at 1% of the initial balance and does not amortise.

For an equipment lender, securitisation can convert a portfolio of originated contracts into term capital-markets funding rather than leaving the assets funded entirely on the lender’s balance sheet or warehouse lines. That can create capacity for further originations while transferring portions of the portfolio’s credit exposure to ABS investors.

The transaction had been through the ratings process in July, but the 14 August closing is a distinct new event and confirms both execution and investor demand.