KBRA Assigns Preliminary Ratings to Stonebriar’s Equipment Contracted Backed Notes
AUG 6, 2020 - 7:48 am
Kroll Bond Rating Agency assigned preliminary ratings to eight classes of notes from SCF Equipment Leasing 2020-1 LLC and SCF Equipment Leasing Canada 2020-1 Limited Partnership Equipment Contract Backed Notes, Series 2020-1. The notes are newly issued asset-backed securities backed by a portfolio of equipment leases and loans.
The transaction represents the seventh equipment ABS serviced by Stonebriar Commercial Finance. The collateral backing the transaction includes: (1) a portfolio of equipment lease contracts and equipment loan contracts, together with interests in the related equipment and other collateral; (2) certain portfolio interest certificates evidencing 100% beneficial interest in a portfolio of leases of titled motor vehicles and the related equipment; and (3) equity interests in certain limited purpose entities formed to own aircraft leases and the related aircraft. The underlying contracts are collateralized by essential use assets in a variety of industries, such as rail, transportation and manufacturing equipment. All of the contracts were directly or indirectly originated by Stonebriar Commercial Finance or Stonebriar Commercial Finance Canada.
The aggregate discounted contract balance (ADB) of the portfolio is approximately $598.8 million. The portfolio comprises 97 contracts to 41 obligors. The average contract is approximately $6.2 million and the average exposure to an obligor is approximately $14.6 million. The maximum exposure to an obligor is approximately $68.1 million or approximately 11.37% 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 8.54%.
The Class A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class E and Class F rated notes benefit from credit enhancement in the form of overcollateralization, excess spread, a reserve account and subordination.
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