The equipment asset-backed securities (ABS) market continued its sharp upward trajectory in the first quarter of 2025, as independent issuers tapped into strong investor demand to price $4.1 billion in new deals, according to Brean Capital’s Q1 Specialty Finance Securitization Update.

The report notes a 34% jump in 2024 issuance over 2023, with Q1 2025 issuance already on pace to surpass last year’s total. “The securitization market remains strong and active,” Brean stated, with spreads across the capital stack tightening significantly in recent months — especially for repeat issuers​.

In particular, spreads on BBB tranches compressed by as much as 145 basis points compared to prior deals, with recent transactions from firms like Commercial Credit Group and Dext Capital pricing well inside 6% yields. Brean’s analysis shows this has created one of the most favorable issuance environments in recent years for equipment ABS​.

Investor preference continues to tilt toward “on-the-run” bonds — recently issued securities with greater liquidity — which are consistently pricing tighter than their off-the-run counterparts. For example, deals like CCG 2025-1 and AXIS 2024-2 are trading inside 5.5%, while older equipment ABS can be 50–150 basis points wider, according to the report.

The momentum appears far from slowing. A strong deal pipeline suggests continued activity in the coming quarters as originators look to capitalize on still-attractive issuance costs and favorable market conditions.

Independent lenders such as Stonebriar, GreatAmerica, and North Mill were among the top issuers over the past year, collectively contributing billions in volume to the space. These non-bank lenders are now driving growth in the equipment finance securitization sector, which has posted a 19% compound annual growth rate since 2014, Brean’s data shows​.

For equipment finance professionals, the takeaway is clear: the market is open, spreads are tight, and investor appetite for yield remains strong. As Brean Capital put it, “This activity signals continued investor confidence in the sector” amid a stabilizing rate environment and improving credit conditions​.

The full Q1 2025 Specialty Finance Securitization Update is available at breancapital.com.