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

KBRA assigns preliminary ratings to four classes of notes issued by NMEF Funding 2022-B, LLC (NMEF 2022-B), an equipment ABS transaction.

NMEF 2022-B represents North Mill Equipment Finance LLC’s (North Mill) sixth equipment ABS. North Mill is an independent equipment finance company created in 2012 when Colford Capital Holdings LLC acquired and re-branded Equilease Financial Services, which had been founded in 1957. InterVest Capital Partners Inc. (formerly Wafra Capital Partners Inc.) subsequently acquired North Mill from Colford Capital Holdings LLC in August 2018.

NMEF 2022-B is backed by a pool of equipment loans and leases (Equipment Contracts). The statistical discounted pool balance (Statistical Pool) totals $266.9 million and represents the projected cash flows of the Equipment Contracts discounted at a rate of 7.80%. As of the initial cutoff date, the discounted contract value will be at least $302.87 million and the initial pool characteristics are expected to be substantially similar to the Statistical Pool. The total collateral may increase by up to a $101.1 million (25% of the total pool balance at the end of the prefunding period) through the addition of Equipment Contracts during the three-month prefunding period. NMEF 2022-B will issue four classes of notes, including a short-term tranche. Credit enhancement includes excess spread, a reserve account, overcollateralization and subordination for senior classes. The overcollateralization 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, accounting for any prefunding that occurs. The reserve account is funded at 1.00% of the initial pool balance and is non-amortizing.

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Related Publications

• Equipment Lease and Loan Global ABS Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization 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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