May remittance reports showed mixed credit performance across securitized equipment loan and lease pools during the April collection period. Annualized net losses (ANL) in KBRA’s headline Equipment Loan & Lease index rose to 0.63%, up 3 basis points (bps) month-over-month (MoM) and 46 bps year-over-year (YoY), while 60+ day delinquencies (DQ) fell 12 bps MoM but increased 30 bps YoY to 0.93% (see Figure 1).
KBRA’s sub-indices exhibited divergent performance. ANLs in the Small-Medium Ticket sub-index came in at 0.47%, improving 9 bps MoM, but moving 27 bps higher YoY, while 60+ day DQs fell 22 bps MoM but rose 94 bps YoY to 1.57% (see Figure 2). The MoM improvement in ANLs was driven by a handful of 2020 and 2021 vintage securitizations that experienced lower charge-offs during the collection period. Conversely, ANLs in KBRA’s Large Ticket sub-index rose to 0.72%, up 9 bps MoM and 57 bps YoY, largely due to both higher charge-offs and lower recovery rates in select 2022 vintage…