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Kroll Bond Rating Agency Assigns Preliminary Ratings Securitized Equipment Receivables Trust 2017-1Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three note classes of Securitized Equipment Receivables Trust 2017-1. The notes are supported by the residual certificates from the Ascentium Capital Equipment Receivables 2015-2 Trust transaction (ACER 2015-2) that closed on October 28, 2015. ACER 2015-2 and SERT 2017-1 feature a "full turbo" waterfall, whereby all collections after expenses and interest payments will pay down principal. Ascentium Capital LLC ("Ascentium" or "the Company") has previously sponsored six term ABS (News - Alert) transactions, two of which have been paid in full. The transaction represents Ascentium's second equipment lease re-securitization. The Company's first re-securitization was issued in April 2016. As of March 1, 2017, the underlying aggregate discounted contract principal balance of the portfolio is approximately $167.0 million. The portfolio is comprised of 4,695 contracts and 4,280 obligors. The average discounted contract balance is approximately $35,559 and the average remaining term is approximately 37 months. The maximum exposure to an obligor is approximately 0.56% of the aggregate discounted contract balance. The securitization is based on the projected equipment loan and lease cash flows discounted at a rate of 4.55%. KBRA considered several key factors in its analysis of this transaction, including:
KBRA has analyzed this transaction using the Equipment Lease & Loan Methodology published on June 30, 2012. The key determinants considered in the rating outcome are: (1) an analysis of the underlying collateral pool, (2) the originator's historical static pool data, (3) the proposed capital structure for the transaction, (4) KBRA's operational assessment on the originator and servicer and (5) the legal structure, transaction documents and legal opinions. KBRA performed cash flow modeling on this transaction to determine whether the projected cash flow from the equipment contracts was sufficient to warrant the requested rating levels. KBRA assumed the following as its base case scenario and subsequently reviewed the multiple coverage given the requested rating category for each note class:
Related Publications: (available at www.kbra.com) About Kroll Bond Rating Agency KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP). View source version on businesswire.com: http://www.businesswire.com/news/home/20170315006290/en/ |