DLL completes first securitization of 2026; Fitch assigns top ratings

DLL closed its first U.S. asset-backed securitization of 2026 with the issuance of $672 million of notes.

The transaction includes a tranche retained by DLL and consists of equipment loans and leases across construction, transportation and materials handling, according to the vendor financer’s Jan. 29 release. Construction assets account for about 60% of the collateral, followed by materials handling at roughly 30% and transportation at about 7%.

Fitch Ratings gave top credit ratings to the bonds in the deal, according to a Jan. 28 Fitch report. The outlook for all of the bonds is stable, meaning Fitch does not expect the ratings to change in the near term.

This deal is backed by higher-quality assets than DLL’s 2024 ABS deal, with more exposure to higher-performing materials handling equipment and less exposure to weaker transportation equipment. Overall performance across equipment portfolios has softened since the pandemic, so Fitch increased its estimate of potential losses to 2.3%, up 20 basis points (bps) compared to the 2024 deal.

This year’s deal also has more built-in protection for investors than the prior securitization, with 9.8% of the structure set aside to absorb losses before investors, an increase of 145 bps, and extra income generation of 3.3% annually, according to the release.

The DLL transaction drew strong investor demand, including new investors, and supports its strategy to diversify and strengthen U.S. dollar funding sources, according to the DLL release.

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