KBRA Assigns Ratings to Post Road Equipment Finance 2025-1, LLC
5 Feb 2025 | New York
KBRA assigns ratings to six classes of notes issued by Post Road Equipment Finance 2025-1, LLC (PREF 2025-1), an equipment ABS transaction.
PREF 2025-1 represents the fourth equipment ABS transaction sponsored by Post Road Equipment Finance, LLC (PREF or the Company). Founded in 2017 and headquartered in Westport, Connecticut, PREF is an independent equipment finance company focused on financing discrete revenue-producing essential-use medium- and large-ticket equipment to corporate obligors. The Company was formerly known as Encina Equipment Finance, LLC and changed its name in March 2023 to Post Road Equipment Finance, LLC. The PREF 2025-1 transaction is secured by a portfolio of equipment lease and loan contracts. The underlying contracts are collateralized by medium- and large-ticket equipment in a variety of industries such as manufacturing, transportation and warehousing, healthcare and social assistance, and waste management and remediation services, amongst others. PREF 2025-1 will issue six classes of notes, including a short-term money market tranche (the Notes) totaling $406.1 million. The Notes benefit from credit enhancement in the form of overcollateralization, excess spread, a reserve account, and subordination for senior classes.
The securitization value of the portfolio is approximately $445.8 million as of December 31, 2024 (Cut-off Date). The securitization value is, for the fixed rate contracts, based on the projected equipment loan and lease cash flows, as well as the residual value of the related equipment, discounted at the respective contract’s lease rate or interest rate and, for the floating rate contracts the principal balance of the contract. The weighted average yield of the underlying contracts is approximately 10.49%. The portfolio is comprised of 170 contracts to 67 obligors. The average contract balance is approximately $2.62 million and the average exposure to an obligor is approximately $6.65 million. The collateral is comprised of 55.15% loans and finance leases, and 44.85% true leases. The weighted average original and remaining contract terms are 56 months and 45 months, respectively. The maximum exposure to an obligor is approximately $29.39 million or approximately 6.59% of the securitization value.
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