KBRA Downgrades All Ratings for Momnt Technologies Trust 2023-1
17 Mar 2025 | New York
KBRA downgrades ratings on all three classes of notes issued on Momnt Technologies Trust 2023-1 (“MMNT 2023-1”), a home improvement loan transaction, due to operational issues and deterioration in collateral credit performance evidenced by increasing cumulative net losses (“CNL”). Concurrently, KBRA has removed all ratings from Watch Downgrade where they were placed on December 13, 2024.
The CNL volume has resulted in the breach of the Cumulative Default Ratio Amortization Event Level I, Level II, and Level III CNL Triggers (“CNL Triggers”), which were breached in August 2024, October 2024, and December 2024, respectively. These breaches caused the deal to pay full-turbo sequential and caused the Class C and Class B interest payments to defer. KBRA’s analysis indicated that existing credit enhancement for the notes is sufficient to support the outstanding ratings. However, the collateral performance to date and the subsequent interest deferrals on the Class B and Class C increase the risk of an Event of Default when such classes become the Controlling Class.
The data used for this review is as of the February 2025 distribution date (January 2025 collection period). To date, the Class A notes have received timely interest payments.
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