Annualized net losses in KBRA’s headline equipment loan and lease index climbed 11 basis points (bps) month-over-month (MoM), driven by a 29-bp MoM increase in KBRA's Large Ticket Sub-Index, but partially offset by a 19-bp improvement in our Small-Medium Ticket Sub-Index. The Large Ticket Sub-Index annualized net loss increases continue to be caused by increased net losses in transactions with high concentrations in trucking collateral.
Meanwhile, headline delinquency rates increased 28 bps during the month, driven by a 79-bp increase in KBRA's Small-Medium Ticket Sub-Index. This index is dominated by transactions sponsored by captive finance companies of computer and office equipment manufacturers. These transactions have a sizable percentage of relatively high credit quality larger obligors. This often results in the occurrence of administrative delinquencies, which are cured within a few months before aging to defaulted status.
Recovery rates for small-medium ticket loans have seen…