Kroll Bond Rating Agency assigned preliminary ratings to eight classes of notes issued by SCF Equipment Leasing 2022-1, an equipment ABS transaction sponsored by Stonebriar Commercial Finance.

SCF 2022-1 represents the ninth equipment ABS sponsored by Stonebriar Commercial Finance. SCF 2022-1 will issue nine classes of notes totaling $722.2 million. The notes are secured by: (1) a portfolio of equipment lease contracts and equipment loan contracts, together with interests in the related equipment and other collateral; (2) certain portfolio interest certificates evidencing 100% beneficial interest in a portfolio of leases of titled motor vehicles and the related equipment; and (3) 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, including marine, rail, aircraft, transportation, medical, energy and manufacturing equipment.

The aggregate discounted contract balance (the ADB) of the portfolio is approximately $752.2 million. The portfolio is comprised of 98 contracts to 51 obligors. The average contract balance is approximately $7.7 million and the average exposure to an obligor is approximately $14.8 million. The maximum exposure to an obligor is approximately $68.9 million or approximately 9.2% of the ADB. The securitization is based on the projected equipment loan and lease cash flows discounted at the respective contract’s internal rate of return. The weighted average IRR is 7.77%. The notes benefit from credit enhancement in the form of overcollateralization, excess spread, a reserve account and, for senior notes, subordination.