Kroll Bond Rating Agency Assigns Final Ratings to Chesapeake Funding II LLC, Series 2016-2 Notes

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes (the “Notes”) issued by Chesapeake Funding II LLC.

The transaction represents the second term ABS issuance for Element Financial Corporation (“Element” or the “Company”) through Chesapeake Funding II LLC (“Chesapeake II”). Since 2014, Element has acquired PHH Corporation’s (“PHH”) and GE Capital’s North American fleet management operations. A majority of the PHH assets are financed through Chesapeake Funding LLC, while the Notes for this transaction are supported by assets originated under the fleet management platform formerly associated with GE Capital Fleet Services.

The Series 2016-2 Notes issued by Chesapeake II are primarily supported by i) leases and related vehicles originated by Element VMS Group (“EVMS”), on behalf of Gelco Fleet Trust (“GFT”) and allocated to a special unit of beneficial interest (“SUBI”) and ii) fleet loans and vehicles originated by Gelco Corporation (“Gelco”). Payments to Chesapeake II will come from i) collections from the leases and the sales proceeds from the disposition of the leased vehicles, and ii) collections from the fleet loans and the fleet loan property.

Credit enhancement for the Notes consists of overcollateralization, subordination and a reserve account funded on the closing date.

KBRA analyzed the transaction using the General Rating Methodology for Asset-Backed Securities published on July 30, 2012.

For complete details on the analysis, please see KBRA’s Pre-Sale Report, which was published today at www.kbra.com.

The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.

             
Series 2016-2 Notes     Rating     Initial Amount
Class A-1     AAA(sf)     231,360,000
Class A-2     AAA(sf)     231,360,000
Class B     AA(sf)     14,140,000
Class C     A(sf)     11,570,000
Class D     BBB(sf)     11,570,000
 

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled ABS: Chesapeake Funding II LLC, – Series 2016-2 Representations and Warranties Disclosure

Related Publications: (available at www.kbra.com)

Follow us on Twitter!
@KrollBondRating

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Patrick McShane, Senior Director
(646) 731-2376
pmcshane@kbra.com
or
Eric Neglia, Senior Director
(646) 731-2456
eneglia@kbra.com
or
Caitlin Colvin, Director
(646) 731-2465
ccolvin@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Patrick McShane, Senior Director
(646) 731-2376
pmcshane@kbra.com
or
Eric Neglia, Senior Director
(646) 731-2456
eneglia@kbra.com
or
Caitlin Colvin, Director
(646) 731-2465
ccolvin@kbra.com