The securities are backed by equipment lease and loan contracts - marking Heller's first entry into the asset-backed market. The company plans in the future to issue additional securities backed by its equipment portfolio as well as other financial assets that it originates.
"We are pleased to lead Heller's first asset-backed transaction and look forward to continuing to work with the company," said Joe Parish, managing director of First Union's Asset Securitization Group. "This transaction is another illustration of how clients can meet their financial needs through our full capital markets capabilities."
Over the last 12 months, First Union has served as lead manager or co-lead manager on seven of the 15 total equipment-backed transactions in the public market.
The Heller transaction consists of four tranches -- $63.0 million of Class A-1 notes; $191.7 million Class A-2; $8.2 million Class B; and $5.5 million Class C. Moody's Investors Service and Fitch Investors Service rated the A-1 notes P-1/F1+, respectively; the A-2 notes Aaa/AAA; the B notes A1/A+; the C notes Baa2/BBB.
Heller, a wholly owned subsidiary of The Fuji Bank in Tokyo, is a diversified financial services provider of a broad array of commercial financial products and services in the United States and internationally. Its services include asset-backed finance, cash flow lending, real estate finance, international asset based finance and factoring and specialized finance. As of June 30, 1997, Heller had total assets of $11.6 billion and approximately 2,200 employees.
First Union has grown its capital markets business substantially over the last three years. In 1996, First Union Capital Markets reported a 75 percent increase in fee income to $464 million from 1995 and a 46 percent increase in pretax net income to $422 million. First Union Capital Markets Corp. is the investment banking subsidiary of First Union Corp.
Charlotte-based First Union Corp. is a leading provider of financial products and services to approximately 12 million customers nationwide. First Union is the nation's sixth-largest bank holding company with assets of $143 billion as of June 30, 1997. It operates financial centers in 12 Eastern states, as well as in Washington, D.C.
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