Monthly Overview
Annualized net losses in KBRA’s headline Equipment Loan and Lease ABS index fell 29 basis points (bps) month-over-month (MoM) but increased 3 bps year-over-year (YoY) to 0.79%. The MoM decline in net losses was mainly driven by the 54-bp MoM drop in KBRA’s Large Ticket sub-index, but was partially offset by a 13-bp MoM increase in KBRA’s Small-Medium Ticket sub-index net losses. The Large Ticket sub-index’s MoM drop in the net loss rate was largely attributable to a sharp increase in recoveries, which reached 83.11%—the highest level since June 2022 (see Figure 4). This rise in recoveries was primarily driven by a few transactions with higher concentrations of trucking collateral, which realized recoveries from previously charged-off loans this month. These sizable recoveries exceeded the three deals' total gross charge-offs, resulting in negative net losses for all three.
Conversely, delinquency performance deteriorated across the headline index and sub-indices during…