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CIT Closes C$515 Million Canadian Equipment Receivables Securitization
Represents CIT’s First Canadian Securitization Since 2009
CIT Group Inc. (NYSE: CIT) cit.com, a leading provider of financing to small businesses and middle market companies, today announced that it has closed a C$515(US$511) million equipment receivables securitization.
“This transaction represents our first asset-backed offering involving Canadian assets since 2009,” said John A. Thain, Chairman and Chief Executive Officer. “The participation of investors from both Canada and the U.S. demonstrates the broad interest in CIT and our continued success accessing diverse and cost efficient funding sources.”
CIT sold three classes of fixed rate notes in a private offering backed by a pool of Canadian equipment receivables from CIT’s Vendor Finance business segment. The weighted average fixed coupon is 2.285%, which represents a weighted average credit spread of 1.31% over benchmark Government of Canada treasury rates. The securitization had a net advance rate of 96.75%. Details of the transaction are as follows:
| Class A-1 | Class A-2 | Class B | |||||||
| Size | C$176,730,000 | C$307,122,000 | C$30,880,000 | ||||||
| Ratings (Moody’s/DBRS) | Aaa(sf)/AAA(sf) | Aaa(sf)/AAA(sf) | A1(sf)/A(sf) | ||||||
| Weighted Average Life to Call (Years)1 | 0.43 | 1.88 | 3.25 | ||||||
| Credit Spread to Benchmark | 0.75% | 1.15% | 2.65% | ||||||
| Fixed Rate Coupon | 1.705% | 2.114% | 3.708% |
1 Calculated based on a 9% conditional prepayment rate assuming the issuer exercises its optional prepayment right when the pool balance under the securitization is less than 10% of the initial pool balance.
CIT intends to use proceeds from the transaction for general corporate purposes.
BofA Merrill Lynch and RBC Capital Markets served as joint lead bookrunners on the transaction.
