Monthly Overview
Annualized net losses in KBRA’s headline Equipment Loan and Lease ABS index increased 19 basis points (bps) month-over-month (MoM) and 6 bps year-over-year (YoY) to 1.08%. The MoM increase in net losses was mainly driven by KBRA’s Large Ticket Sub-Index, which jumped 24 bps during the month. This was further impacted by a 10-bp MoM rise in KBRA’s Small-Medium Ticket Sub-Index. The Large Ticket’s MoM rise in net losses was largely attributable to three deals sponsored by the same issuer with high concentrations of trucking collateral—an asset class that has been experiencing volatility in performance over the past two years. Trucking net losses have shown periods of rising net losses that then stabilize in later months as a result of longer delays in realizing recoveries following repossession of the collateral.
Meanwhile, delinquency performance was more muted across the sub-indices and headline index this month, with the headline index 60+ day delinquency rate…