AT&T Capital Corp., a powerhouse in leasing to small businesses, has offered a $2.9 billion securitization to help finance its new independence from Ma Bell.
The huge offering, backed mainly by a pool of equipment leases, closed last Tuesday and received Fitch Investors Service's highest rating. Investor appetite was said to be strong.
Mark Girolamo, a fixed-income analyst at Bear, Stearns & Co., said $1.1 billion of the securitization will pay for the sale of AT&T Capital from parent AT&T Corp. to a consortium led by GRS Holdings Ltd., Babcock and Brown, and the finance company's management. The purchase price was $2.2 billion.
The securitization - one of the largest ever in an increasingly popular asset class - is Morristown, N.J.-based AT&T Capital's first in the public market.
A Fitch spokeswoman said equipment lease securitization volume is expected to reach $10 billion this year, up 42% from the rating service's original estimate.