KBRA Assigns Preliminary Ratings to NMEF 2022-A, LLC Funding

NEW YORK–(BUSINESS WIRE)–KBRA assigns preliminary ratings to five classes of bonds issued by NMEF Funding 2022-A, LLC (“NMEF 2022-A”), an equipment ABS transaction.

NMEF 2022-A represents the fifth ABS equipment from North Mill Equipment Finance LLC (“North Mill”). North Mill is an independent equipment finance company formed in 2012 when Colford Capital Holdings LLC acquired and renamed Equilease Financial Services, which had been founded in 1957. Wafra Capital Partners subsequently acquired North Mill from Colford Capital Holdings LLC in August 2018 .

NMEF 2022-A is backed by a pool of equipment loans and leases (“equipment contracts”). The discounted statistical pool (“statistical pool”) balance totals $313.68 million and represents projected cash flows from equipment contracts discounted at a rate of 4.00%. At the initial deadline, the present value of the contract will be at least $337.94 million and the initial characteristics of the pool are expected to be substantially similar to those of the statistical pool. The total guarantee can increase up to $82 million (20% of the pool balance) through the addition of equipment contracts during the three-month pre-funding period. NMEF 2022-A will issue five classes of notes, including a short-term tranche. Credit enhancement includes excess spread, reserve account, overcollateralization and subordination for higher classes. Overcollateralisation is subject to a target equal to 20.5% of the current pool balance and a floor equal to 0.50% of the initial pool balance, taking into account any pre-funding that occurs. The reserve account is funded at 1% of the initial pool balance and is not amortizable.

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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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Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a rating agency with the UK Financial Conduct Authority under the temporary registration scheme. In addition, KBRA is designated as the Designated Rating Agency by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.

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