Monthly Overview
Annualized net losses in KBRA’s headline Equipment Loan and Lease ABS Index increased 26 basis points (bps) month-over-month (MoM) and increased 2 bps year-over-year (YoY) to 1.05%. The MoM rise in net losses was driven by increases in both of KBRA’s sub-indices, with the Small-Medium Ticket Sub-Index rising 15 bps MoM and the Large Ticket Sub-Index rising 33 bps. The Large Ticket’s MoM net loss rate deterioration was largely due to a reversal in two deals from the same issuer that posted negative losses last month due to larger-than-typical recoveries. This variability in recoveries from month to month is common for Large Ticket deals with higher concentrations of trucking collateral, which often experience lagging recoveries following initial charge-offs. The Small-Medium Ticket’s increase in net losses was almost entirely driven by one 2024 deal that incurred increased losses this month.
While delinquency performance was generally unchanged for the headline index…