KBRA Assigns Preliminary Ratings to Equipment ABS from North Mill Equipment Finance

Kroll Bond Rating Agency assigned preliminary ratings to five classes of notes issued by NMEF Funding 2022-A, an equipment ABS transaction from North Mill Equipment Finance.

NMEF Funding 2022-A represents North Mill Equipment Finance’s fifth equipment ABS. North Mill Equipment Finance is an independent equipment finance company that was created in 2012 when Colford Capital acquired and rebranded Equilease Financial Services, which was founded in 1957. Wafra Capital Partners subsequently acquired North Mill Equipment Finance from Colford Capital in August 2018.

NMEF Funding 2022-A is backed by a pool of equipment loans and leases. The statistical discounted pool balance totals $313.68 million and represents the projected cash flows of the equipment contracts discounted at a rate of 4%. As of the initial cutoff date, the discounted contract value will be at least $337.94 million and the initial pool characteristics are expected to be substantially similar to the statistical pool. The total collateral may increase by up to a $82 million (20% of the pool balance) through the addition of equipment contracts during the three-month prefunding period.

NMEF Funding 2022-A will issue five classes of notes, including a short-term tranche. Credit enhancement includes excess spread, a reserve account, overcollateralization and subordination for senior classes. The overcollateralization is subject to a target equal to 20.5% of the current pool balance and a floor equal to 0.5% of the initial pool balance, accounting for any prefunding that occurs. The reserve account is funded at 1% of the initial pool balance and is non-amortizing.

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