Kroll Bond Rating Agency (KBRA) assigned preliminary ratings to seven classes of notes from SCF Equipment Leasing 2018-1 and SCF Equipment Leasing Canada 2018 Limited Partnership Equipment Contract Backed Notes, Series 2018-1. The notes are newly issued asset-backed securities backed by a portfolio of equipment leases and loans.
The transaction is secured by a portfolio of equipment lease contracts and equipment loan contracts (together with interests in the related equipment and other collateral), certain portfolio interest certificates evidencing 100% beneficial interest in a portfolio of leases of titled motor vehicles and the related equipment and equity interests in certain limited purpose entities formed to own aircraft leases and the related aircraft. The underlying contracts are collateralized by essential use assets in a variety of industries, such as marine, rail, transportation and energy. All of the contracts were directly or indirectly originated by Stonebriar Commercial Finance or Stonebriar Commercial Finance Canada.
The aggregate discounted balance (ADB) of the portfolio is approximately $598.5 million. The portfolio is comprised of 71 contracts to 43 obligors. The average contract is approximately $8.4 million and the average exposure to an obligor is approximately $13.9 million. The maximum exposure to an obligor is approximately $119.6 million or approximately 20.0% of the ADB. The securitization is based on the projected equipment loan and lease cash flows discounted at a rate of 9.12%.
The transaction benefits from credit enhancement in the form of overcollateralization, excess spread, a reserve account and subordination with respect to the Class A1 Notes, Class A2 Notes, Class B Notes, Class C Notes, Class D Notes, Class E Notes and Class F Notes.
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