KBRA assigned preliminary ratings to six classes of notes issued by Barings Equipment Finance 2026-B (Barings 2026-B), an equipment ABS transaction.
Barings 2026-B represents the 24th equipment ABS sponsored by MassMutual Asset Finance (MMAF), a wholly-owned subsidiary of Massachusetts Mutual Life Insurance (MassMutual) and has an operating history dating back to 2003. The Barings 2026-B transaction is secured by a portfolio of equipment lease and loan contracts, together with interests in the related equipment and other collateral. Barings 2026-B will issue six classes of notes. The notes benefit from credit enhancement in the form of overcollateralization, excess spread, reserve account and subordination for senior classes.
The aggregate securitization value (ASV), which represents the discounted value of the cashflows, other than interest or implicit yield on floating rate contracts, from the Financed Units, is approximately $1.01 billion, as of July 31, 2026, and based on the statistical discount rate of 6.50%. The ASV includes 329 financed units to 100 obligors. The average financed unit balance is approximately $3.08 million, and the average obligor exposure is approximately $10.13 million. The maximum obligor exposure, which is to the U.S. government, is $153.39 million or 15.15% of the ASV. KBRA has ratings on the U.S. government, which are available on KBRA.com. The next largest obligor exposure is $60.39 million, or 5.96% of the ASV.
