KBRA Affirms Rating for ECN Capital Corporation

KBRA affirms the issuer rating of BB+ for ECN Capital Corporation (TSX: ECN or “the company”), a financing company headquartered in South Florida and Toronto. The rating Outlook is Stable.

The rating is supported by ECN’s solid competitive position in the manufactured housing segment via its Triad business and a growing presence in RV and marine finance under the leadership of a seasoned management team. While ECN’s operating scale and business scope decreased following the sale of Service Finance Company in 2021 and the Kessler Group in 2022, the company has since shifted to a simpler business model and realigned corporate functions within Triad to better position this core segment for the next stage of growth. Earnings, which have been impacted by various headwinds over the last few years, rebounded in 2024, following a net loss in 2023, and remained solid through 9M25. Strengthening financial performance over recent periods primarily reflects growth across Triad and RV and marine finance segments, growing servicing revenue, the clearing of backlog in the manufactured housing industry, and the absence of significant fair value losses that impacted results in 2023. Management has also since focused on improving its interest rate risk management by implementing hedges upon loan approval versus at time of funding previously. Future periods are expected to benefit from the completion of ECN’s Corporate Simplification Plan, which is anticipated to yield $5.5 million to $6.5 million of cost savings in 2025. In addition, the rating takes into account the improvement in debt-to-equity to 2.7x as of September 30, 2025, after peaking in 2022 as the company continues to focus on deleveraging. Meanwhile, ECN has expanded funding sources supporting Triad’s growth via partnerships with Blackstone and Carlyle, which were renewed and upsized last year, and a new agreement was added with J.P. Morgan and New York Life in 2025. Partnership with Monroe Capital was added to support the growth of RV and Marine segment in 2025. The rating considers ECN’s adequate liquidity and strong asset quality metrics, supported by robust underwriting standards and a comprehensive risk management framework. The rating remains constrained by exposure to overall economic conditions in North America and inherent industry-related risks, including industry-specific downturns.

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