Kroll Bond Rating Agency assigned preliminary ratings to five classes of notes issued by NMEF Funding 2023-A, an equipment asset-backed securitization. NMEF 2023-A represents North Mill Equipment Finance’s seventh equipment ABS.

NMEF 2023-A is backed by a pool of equipment loans and leases (equipment contracts). The statistical discounted pool balance totals $388.65 million and represents the projected cash flows of the equipment contracts discounted at a rate of 8.25%. As of the initial cutoff date, the discounted contract value will be at least $388.65 million and the initial pool characteristics are expected to be substantially similar to the statistical pool. The total collateral may increase by up to $68.59 million (15% of the collateral balance) through the addition of equipment contracts during the three-month prefunding period.

NMEF 2023-A will issue five classes of notes, including a short-term tranche. Credit enhancement includes a reserve account, overcollateralization and subordination for senior classes. The overcollateralization is subject to a target equal to 18.25% 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, including the maximum amount of prefunding, and is non-amortizing.