February remittance reports showed mixed credit performance across securitized equipment loan and lease pools during the January collection period. Annualized net losses (ANL) in KBRA’s headline Equipment Loan & Lease index fell to 0.44%, improving 10 basis points (bps) month-over-month (MoM) but remaining 43 bps higher year-over-year (YoY), while 60+ day delinquencies (DQ) moved up 12 bps MoM and 26 bps YoY (see Figure 1).
Turning to KBRA’s sub-indices, ANLs exhibited divergent performance while DQs ticked up across both indices on a MoM basis. ANLs dropped 56 bps MoM to 0.31% in our Small-Medium Ticket index, an improvement led partially by a marked increase in recoveries and significantly lower charge-offs in a pair of 2022 vintage securitizations (see Figure 2). However, ANLs climbed 20 bps MoM to 0.51% in the Large Ticket index, as a sizable 2022 vintage deal faced both lower recoveries and higher charge-offs during the month (see Figure 3).
The data shown in this report and…