North Mill Equipment Finance Closes $353MM Term Securitization

North Mill Equipment Finance closed its sixth commercial equipment-backed securitization, NMEF Funding 2022-B. The $353 million transaction is North Mill’s second ABS transaction this year, bringing the company’s total privately placed bond proceeds raised this year to $724 million. North Mill’s capital markets team has now raised $1.4 billion in bonds since inception.

NMEF Funding 2022-B featured fixed-rate asset-backed securities across three classes of notes, with the A note split into two tranches: an A-1 money market class and a tranche rated AAA/Aaa by Kroll Bond Rating Agency and Moody’s. This is North Mill’s first ABS issuance to be rated by Moody’s and is also its first transaction to include all investment grade tranches.

“The transaction was well-received by institutional investors, with 31 unique investors, including 12 new investors in the NMEF shelf, making it NMEF’s largest ABS investor base of all time. We attribute this to the addition of a big-three rating agency with a 4% base case cumulative net loss assumption as well as a reduction of the base case loss assumption from KBRA from 6.1%-6.6% on our last transaction down to 4.79% on NMEF 2022-B,” Mark Bonanno, president and chief operating officer of North Mill Equipment Finance, said.

“The transaction includes a $101 million three-month post-close prefunding period that gives NMEF a fixed cost of funds for fourth quarter originations in a rising rate environment,” Pier Snider, CFO of North Mill Equipment Finance, said.

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