KBRA Preliminarily Rates Dext Capital’s First ABS Transaction

Kroll Bond Rating Agency assigned preliminary ratings to four classes of notes issued by Dext ABS 2020-1, the first equipment ABS transaction from Dext Capital.

Dext Capital, founded in 2018 and headquartered near Portland, OR, is an independent equipment finance company focused primarily on financing medium- and small-ticket medical equipment.

As of Sept. 30, 2020, the pool of equipment contracts backing the transaction (statistical pool) has a discounted pool balance of $112.26 million, based on a 7.4% discount rate. While the statistical pool does not represent the final pool of collateral to be sold on the closing date of the transaction, it is anticipated that the final pool will have characteristics substantially similar to the statistical pool.

Dext ABS 2020-1 will issue four classes of notes. Credit enhancement consists of overcollateralization, a cash reserve, subordination benefiting senior classes and excess spread. The overcollateralization is subject to a target equal to 5.9% of the initial pool balance and is non-amortizing after reaching this target level. The reserve account is funded at 2% of the initial pool balance and is non-amortizing.

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