March remittance reports exhibited mixed credit performance across securitized equipment loan and lease pools during the February collection period, showing divergent performance between KBRA’s Small-Medium and Large Ticket indices. Annualized net losses (ANL) in KBRA’s headline Equipment Loan & Lease index moved up 20 basis points (bps) month-over-month (MoM) and 59 bps year-over-year (YoY), coming in at 0.64%, while 60+ day delinquencies (DQ) rose 2 bps MoM and 36 bps YoY to 0.89% (see Figure 1).
Looking at KBRA’s sub-indices, we note ANLs in the Small-Medium Ticket index climbed 72 bps MoM and 91 bps YoY to 1.04%, while 60+ day DQs increased 5 bps MoM and 68 bps YoY to 1.38% (see Figure 2). We note the upswing in ANLs was mainly driven by higher charge-offs across few 2021 and 2022 vintage securitizations, which include some larger obligor concentrations. Conversely, ANLs in the Large Ticket index came in at 0.36%, improving 14 bps MoM (largely due to a combination of lower…