KBRA Assigns Preliminary Ratings to Auxilior Capital Partners’ First Equipment ABS Transaction

Kroll Bond Rating Agency assigned preliminary ratings to seven classes of notes issued by Auxilior Term Funding 2023-1, LLC (Auxilior 2023-1), Auxilior Capital Partners’ first equipment ABS transaction.

Auxilior Capital Partners is an independent finance company founded in 2020 and located in Plymouth Meeting, PA. The company provides financing to small- and medium-sized businesses in three finance program groups: construction and infrastructure, transportation and logistics, and franchise finance. The company’s originations strategy is vendor-focused, using managements’ relationships with vendors and manufacturers to develop private label and sales-catalyst programs. Auxilior is privately held, primarily by Mizuho Financial Group, Marubeni Corporation and private equity firm Patriot Financial Partners. As of Sept. 30, Auxilior’s portfolio totaled $1.2 billion in net investments across 5,551 contracts and 4,437 customers.

Auxilior 2023-1 will issue seven classes of notes, including a short-term money market tranche. Credit enhancement for the notes includes a reserve account, overcollateralization, subordination for senior classes and excess spread. The aggregate securitization value of the portfolio as of Oct. 31 is $386.39 million (Cutoff Date ASV). The Cutoff Date ASV is based on the projected loan and lease cash flows, as well as the residual value of the related equipment, discounted at a statistical discount rate of 10.2%. The Cutoff Date ASV includes 3,760 contracts for an average Cutoff Date ASV of $102,762.

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