Marlin 2022-1 represents Marlin Leasing’s 12th equipment ABS. Marlin Leasing, a wholly-owned subsidiary of Marlin Business Services, is an independent commercial finance company founded in June 1997 to originate and service small-ticket equipment leases. Beginning in 2015, Marlin Business Services’ originations expanded through Marlin Leasing’s affiliate, Marlin Business Corporation (formerly known as Marlin Business Bank), to include an unsecured working capital loan product with primarily the same obligors as the small-ticket equipment lease product. Marlin Leasing’s prior equipment ABS, Marlin Receivables 2018-1, closed in July 2018 and has been fully repaid. Prior to the 2018 issuance, Marlin Leasing had not issued an equipment ABS since February 2010.
Marlin 2022-1 will issue six classes of notes, including a short-term tranche. Credit enhancement for the notes include excess spread, a reserve account, overcollateralization and, for senior classes, subordination. The overcollateralization is subject to a target equal to 12% of the current pool balance and a floor equal to 1% of the initial pool balance. The reserve account is funded at 0.5% of the initial pool balance and is non-amortizing. The aggregate initial principal amount will be either $695.27 million (large pool) or $500.55 million (small pool). The sponsor will make the determination regarding the aggregate initial principal amount of the notes based on, among other considerations, market conditions and investor demand at the time of pricing.
The aggregate securitization value (ASV) represents the discounted value of the projected cash flows of the contracts included in the collateral pool using a discount rate based on the interest rate on the notes plus fees and other amounts. As of April 30, based on a discount rate of 5.78% for the equipment loans and leases, the aggregate securitization value (statistical ASV) will be $759.06 million for the large pool or $546.47 million for the small pool. The statistical ASV will include cash flows from three types of originations: small ticket equipment contracts (93% large pool/91% small pool), equipment contracts financing mid- to large-ticket equipment originated by a third party and purchased by Marlin Leasing (5% large pool/7% small pool) and working capital loans originated by Marlin Business Corporation and purchased by Marlin Leasing (3% large pool/3% small pool).
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