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Securitised Equipment Receivables Ltd (SERL), a special purpose securitisation company, will issue its first commercial paper program in the New Zealand market, under a structure arranged by the National's Securitisation Group. The NZ$250 million deal is the first public securitisation of heavy equipment launched in the Australian and New Zealand securitisation markets. SERL will purchase, on an ongoing basis, secured loans, leases and hire-purchase contracts originated by Gough Finance, a member of the Gough Gough Hamer Group of companies. Philippe Blin, Head of Securitisation for Australia and New Zealand at the National, said: "The main challenge in this deal was the absence of a precedent in Australia and New Zealand. "This meant we had to come up with a risk analysis approach and modelling which was tailor-made to the specific credit issues prevalent in this deal. "As a result of the high quality of the assets being securitised, the rating process resulted in the required credit enhancement being a low 10%," Mr Blin said. The size of the securitised portfolio is currently approximately NZ$140 million. The Gough Group of companies was established in 1929 and operates in New Zealand and, to a lesser extent, Australia. It is a leading supplier and servicer of industrial equipment, machinery and parts, primarily to the contracting, mining, construction, forestry and transport industries. The Group's core activity is the New Zealand franchise it holds for Caterpillar products. The commercial paper issued by SERL is rated A-1+ by Standard & Poor's and will be placed by three dealers, being Bank of New Zealand (the National's New Zealand subsidiary), National Bank of New Zealand and Citibank. Bank of New Zealand also acts as lead manager of the program, swap provider, standby servicer, and provides a limited recourse guarantee mitigating concentration risks.
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