North Mill Equipment Finance closed its fifth commercial equipment-backed securitization (ABS), NMEF Funding 2022-A. The $371.07 million transaction represents North Mill’s largest ABS issuance to date, surpassing its $236.588 million ABS issuance in March 2021.

The transaction was well received by institutional investors despite being in the market during a period of heightened macroeconomic volatility, as pricing occurred on the day of Russia’s invasion into Ukraine. North Mill had no investors drop their order post announcement of the invasion and ultimately priced the transaction at a WAL-adjusted spread of 1.54%. The transaction featured 23 investors, eight of which were first time investors in North Mill.

NMEF 2022-A featured five tranches of notes, achieving an 88.35% advance rate through the Class D note. The transaction was rated by Kroll Bond Rating Agency, which assigned a lower base case rating agency loss assumption for NMEF 2022-A vs. the company’s preceding issuance (NMEF 2021-A), permitting North Mill to achieve higher proceeds through the capital stack (88.35% in NMEF 2022-A vs. 86.03% in NMEF 2021-A). The $371.1 million transaction was backed by $420 million in equipment loan and lease contracts, $72 million of which will be contributed via a three-month prefunding period post-close.

“I’m extremely proud of the team’s execution on this transaction, especially during such a challenging macro-economic environment and geopolitical discord,” Mark Bonanno, president and chief operating officer of North Mill Equipment Finance, said. “The base case loss assumption assigned to this transaction by the rating agency was 115 bps lower than our 2021 ABS transaction, which is a testament to the quality of North Mill’s underwriting and servicing model and a validation of our business strategy of targeting higher credit quality obligors, diversified equipment and industry types and a refined list of third-party originators with whom we partner to offer financing solutions.”

Truist Securities served as sole book runner for the transaction.