Kroll Bond Rating Agency (KBRA) assigned preliminary ratings to eight classes of notes issued by Stonebriar Commercial Finance, including SCF Equipment Leasing 2021-1 and SCF Equipment Leasing Canada 2021-1. The notes are newly issued asset-backed securities (ABS) backed by a portfolio of equipment leases and loans.

The SCF 2021-1 transaction represents the eighth equipment ABS sponsored by Stonebriar Commercial Finance LLC. SCF 2021-1 includes nine classes of notes. Credit enhancement includes overcollateralization, a reserve account, subordination for senior classes and excess spread.

The aggregate discounted contract balance of the portfolio is approximately $1.01 billion. The portfolio is comprised of 145 contracts to 64 obligors. The average contract balance is approximately $7 million and the average exposure to an obligor is approximately $15.8 million. The maximum exposure to an obligor is approximately $222 million or approximately 22% of the ADB. The securitization is based on the projected equipment loan and lease cash flows discounted at the respective contract’s internal rate of return (IRR). The weighted average IRR is 8.24%.

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