PEAC Solutions Issues New $766 Million ABS Backed by Equipment Leases, Loans, and Xerox Receivables.

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Date: Tuesday February 4, 2025 03:45:49 pm
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    PEAC Solutions Issues New $766 Million ABS
    Backed by Equipment Leases, Loans, and Xerox Receivables.

    New York, NY โ€” January 2025 โ€“ PEAC Solutions, a leader in commercial lending, has announced the launch of PEAC Solutions Receivables 2025-1 LLC, a new Asset-Backed Security (ABS). This marks the companyโ€™s 15th ABS offering and is backed by a diverse portfolio of receivables, including equipment leases, loans, and working capital loans. A key component of this transaction is the significant inclusion of receivables sourced through Xerox Corporation, with whom PEAC maintains an exclusive partnership.

    Background on PEAC Solutions
    Founded in 1997 as Marlin Leasing Corporation, PEAC Solutions has grown to become a prominent provider of financial services to small and mid-sized businesses. The company specializes in offering equipment financing and working capital loans.

    In 2022, the company rebranded to PEAC Solutions after being acquired by HPS Investment Partners, LLC, expanding its product offerings and market presence across the U.S. and Europe.

    The PEAC 2025-1 Securitization
    The newly issued PEAC Solutions Receivables 2025-1 LLC is backed by a diverse range of receivables, including:
    Small-ticket equipment contracts originated by PEAC Solutions, Xerox equipment receivables from their partnership, Working capital loans for short-term business financing.

    As of December 31, 2024, the total aggregate securitization value (ASV) of these assets is estimated at $766.07 million, with contributions from PEAC Solutions’ direct contracts (49.24%), Xerox-originated contracts (46.10%), and working capital loans (4.66%).

    The PEAC-Xerox Partnership
    A key feature of this securitization is the inclusion of Xerox receivables. Since entering a forward flow agreement with Xerox in December 2022, PEAC Solutions has acted as Xeroxโ€™s exclusive partner for dealer-originated receivables. By January 2024, PEAC Solutions had purchased $1.70 billion in Xerox receivables, a substantial portion of which is now included in this ABS. The inclusion of Xeroxโ€™s low risk, established receivables adds stability and credibility to the offering.

    Securitization Structure and Credit Enhancements
    The PEAC Solutions Receivables 2025-1 LLC issues five classes of notes, with one short-term tranche. These notes are secured by the cash flows from the underlying receivables. To enhance the security of the transaction, PEAC Solutions has incorporated several key credit protections:
    Excess spread provides a cushion against potential losses. A reserve account funded at 0.50% of the initial ASV acts as a financial buffer. Overcollateralization, targeting 14% of the current ASV, ensures additional protection for investors. Subordination of certain tranches shields senior tranches from defaults.

    Why Investors Should Pay Attention
    The PEAC Solutions Receivables 2025-1 LLC ABS presents an attractive investment opportunity, with a diversified asset pool and strong credit enhancements. The inclusion of Xerox receivables further strengthens its appeal, offering investors a relatively low-risk avenue for returns.

    The securitization is structured to provide stable returns, supported by PEACโ€™s proven expertise in commercial lending and a trusted partnership with Xerox.

    With the PEAC Solutions Receivables 2025-1 LLC ABS, PEAC Solutions continues to solidify its position in the commercial lending and securitization markets. The transactionโ€™s diversified backing and strong partnerships, particularly with Xerox, make it an appealing investment opportunity. As PEAC Solutions grows its ABS offerings, investors can look forward to continued innovation and secure financial solutions for businesses.

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