NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes from NMEF Funding 2019-A, LLC Equipment Receivables Backed Notes, Series 2019-A.
The NMEF Funding 2019-A Notes represent North Mill Equipment Financing’s third equipment ABS transaction. The NMEF Funding 2015-A Notes were issued in April 2015 and have fully repaid and the NMEF Funding 2016-A Notes, issued in June 2016, have a 15.72% pool factor as of November 2019. The transaction is secured by special unit of beneficial interest certificates (“SUBI Certificates”) that are transferred from the North Mill Equipment Finance to NMEF Funding 2019-A, LLC. The SUBI Certificates evidence the interests in the NM Credit 2019-A SUBI, which represent the entire beneficial interest in certain equipment loans and leases (“Equipment Contracts”) and associated vehicles and other trust assets in the North Mill Credit Trust. NMEF Funding 2019-A will issue four classes of notes.
The discounted balance (“Discounted Contract Balance”) of the Equipment Contracts represents the projected equipment loan and lease cash flows discounted at a rate of 6%. At closing, the Discounted Contract Balance will total $162 million and may increase by up to $35 million with the addition of Equipment Contracts during a 90-day prefunding period. The Discounted Contract Balance at closing includes 2,659 fixed rate Equipment Contracts with an average remaining Discounted Contract Balance of $60,954. The Equipment Contracts finance primarily transportation and construction equipment, have a weighted average annual percentage rate of 17.72%, a 688 weighted average FICO, and a weighted average original term and remaining term of 53 months and 46 months, respectively.
The initial hard credit enhancement of 42.85%, 31.50%, 22.75%, and 18.00% of the Discounted Contract Balance, respectively, for the Class A, B, C and D notes, is comprised of overcollateralization, a cash reserve account and subordination (except in the case of the Class D notes). All classes also benefit from excess spread credit enhancement which is estimated at 0.90% per year.
To access ratings, reports and disclosures, click here.
Related Publications: (available at www.kbra.com)
- NMEF Funding 2019-A, LLC Pre-Sale Report
- Global Equipment Lease & Loan Methodology
- Global Structured Finance Counterparty Methodology
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Cecil Smart, Jr., Managing Director
Joanne DeSimone, Senior Director
Zara Shirazi, Director
Ted Burbage, Managing Director