NEW YORK–(BUSINESS WIRE)–KBRA assigns preliminary ratings to six classes of bonds issued by Encina Equipment Finance 2022-1, LLC (“Encina 2022-1”), an equipment ABS transaction.
Encina Equipment Finance, LLC (“Encina”), founded in 2017 and based in Westport, Connecticut, is an independent equipment finance company focused on financing medium to heavy duty equipment producing discrete revenue for large corporate debtors. Encina 2022-1 represents Encina’s second public equipment ABS transaction.
As of April 30, 2022, the securitization value of the pool of equipment contracts supporting the transaction was approximately $280.1 million. The pool includes 50 obligors with a major obligor concentration of 7.6% and an average contract securitization value of approximately $1.8 million. The pool is diversified by industries, equipment types and states.
Encina 2022-1 will issue six tranches of notes totaling $246.5 million. Credit enhancement consists of overcollateralisation, reserve account, subordination for higher classes and excess margin. The initial OC of 12.0% is subject to a target equal to the greater of 15.0% of the current securitization value and 6.5% of the original securitization value. The reserve account will be capitalized at 1.0% at closing and is not amortizable.
Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.
A description of all substantially significant sources that were used to prepare the credit rating and information on the methodology(ies) (including all significant models and sensitivity analyzes of the main relevant rating assumptions, the where applicable) used to determine the credit rating are available in the information disclosure form(s) located here.
Information on the meaning of each rating category can be found here.
Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available at www.kbra.com.
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