December remittance reports disclosed somewhat weaker credit performance across securitized equipment loan and lease pools during the November collection period, represented by increases in annualized net losses (ANL). ANLs in KBRA’s headline Equipment Loan & Lease Index climbed 26 basis points (bps) month-over-month (MoM) and 45 bps YoY, coming in at 0.50%, primarily as a result of increased ANLs in KBRA’s Small-Medium Ticket index. Meanwhile, 60+ day delinquency rates moved up 9 bps MoM but decreased 20 bps YoY to 0.64% (see Figure 1).
In KBRA’s Small-Medium Ticket and Large Ticket indices, ANLs increased 52 bps and 8 bps MoM, to 0.74% and 0.35%, respectively. The increase in the Small-Medium Ticket index ANL was almost entirely driven by pools with significant concentrations of stronger credit quality obligors. Collateral pools of this type may periodically exhibit administrative delinquencies that are generally not indicative of credit issues. In some cases, however, the…