KBRA assigned preliminary ratings to six classes of notes issued by NMEF Funding 2025-B (NMEF 2025-B), an equipment ABS.
NMEF 2025-B represents North Mill Equipment Finance’s 10th equipment ABS. NMEF 2025-B is the first North Mill transaction to include contracts originated by Pawnee Leasing. In April 2025, North Mill acquired Pawnee, pursuant to final approval from the U.S. Bankruptcy Court for the District of Delaware as a result of a court-supervised sale and investment solicitation process initiated in Canada.
NMEF 2025-B is backed by a pool of equipment loans and leases. The statistical discounted pool balance totals $582.37 million and represents the projected cash flows of the equipment contracts discounted at a rate of 7.05%. Pawnee originated contracts represent approximately 22% of the statistical pool.
NMEF 2025-B will issue six classes of notes, including a short-term tranche. Credit enhancement includes a reserve account, overcollateralization (O/C), excess spread and subordination for senior classes. The O/C is subject to a target equal to 18.50% of the current pool balance and a floor equal to 0.50% of the initial pool balance. The reserve account is funded at closing at 1.00% of the initial pool balance and is non-amortizing.
