Kroll Bond Rating Agency (KBRA) assigned preliminary ratings to five classes of notes anticipated to be issued by Chesapeake Funding II.

The transaction represents the seventh term ABS issuance for Element Fleet Management through Chesapeake Funding II.

There are six additional term series of notes issued by Chesapeake II under the base indenture and all will remain outstanding on the expected closing date of the Series 2018-2 Notes (2018-2 Notes).

The Series 2018-2 Notes issued by Chesapeake II will be primarily supported by i) leases and related vehicles originated by Element Fleet Corporation (EFC) and allocated to one or more special units of beneficial interest (SUBIs) and ii) fleet loans made by the Issuer to Chesapeake Finance Holdings II.

Payments to Chesapeake II will come from i) collections from the leases and the sales proceeds from the disposition of the leased vehicles, and ii) collections from the fleet loans and the fleet loan property. The leases and vehicles supporting the Series 2018-2 Notes are a shared pool of leases allocated to SUBI-2 or DLPT Lease SUBI, which also support other series of notes issued from Chesapeake II. As of May 31, 2018, the collateral has an initial receivables balance of $6.17 billion.

Credit enhancement for the Notes consists of overcollateralization, subordination and a reserve account funded on the closing date.

KBRA analyzed the transaction using the General Rating Methodology for Asset-Backed Securities published on November 28, 2017.