Kroll Bond Rating Agency assigned preliminary ratings to six classes of notes issued by Encina Equipment Finance 2021-1, an asset-backed securitization collateralized by a pool of equipment loans and leases.

Encina Equipment Finance 2021-1 is Encina Equipment Finance’s first public equipment ABS transaction. Encina Equipment Finance, founded in 2017 and headquartered in Westport, CT, is an independent equipment finance company focused on financing medium- and large-ticket equipment to corporate obligors.

As of April 30, 2021, the securitization value of the pool of equipment contracts backing the transaction was approximately $285 million. The pool includes 43 obligors with a top obligor concentration of 6.6% and an average contract securitization value of approximately $2.5 million. The pool is diversified by industries, equipment types and states.

Encina Equipment Finance 2021-1 will issue six tranches of notes totaling $258.44 million. Credit enhancements consist of overcollateralization, a reserve account, subordination for senior classes and excess spread. The initial overcollateralization of 9.25% is subject to a target equal to the greater of 14.25% of the current securitization value and 8.75% of the initial securitization value. The reserve account will be funded in an amount equal to at least 1.25% at closing and is permitted to release to no less than 1% of the initial pool balance in month 25.