Kroll Bond Rating Agency assigned preliminary ratings to four classes of notes issued by MMAF Equipment Finance LLC 2024-A (MMAF 2024-A), an equipment ABS transaction from MassMutual Asset Finance.
MMAF 2024-A represents the 20th equipment ABS sponsored by MassMutual Asset Finance, which is a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company and has an operating history dating back to 2003. The MMAF 2024-A transaction is secured by a portfolio of equipment lease and loan contracts, together with interests in the related equipment and other collateral (together, the financed units). The financed units include various types of equipment, including transportation equipment, federal energy equipment, software, machinery and equipment, material handling equipment, energy management, vending equipment, energy production, marine equipment, construction equipment, real estate, rail equipment and telecommunications. MMAF 2024-A will issue four classes of notes. The notes benefit from credit enhancement in the form of overcollateralization, excess spread and a reserve account.
The aggregate securitization value (ASV), which represents the discounted value of the cashflows, other than interest or implicit yield on floating rate contracts, from the financed units is $1,169.56 million, as of Nov. 30, 2023, and based on the statistical discount rate of 7.7%. The ASV includes 337 financed units to 65 obligors. The average financed unit balance is approximately $3.47 million and the average obligor exposure is approximately $17.99 million. The maximum obligor exposure, which is to the U.S. government, is $312.84 million or 26.75% of the ASV. The next largest obligor exposure is $123.56 million, or 10.57% of the ASV.
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