KBRA Assigns Preliminary Ratings to SCF Equipment Leasing 2017-2, LLC, Equipment Contract Backed Notes, Series 2017-2

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four note classes of SCF Equipment Leasing 2017-2 LLC Equipment Contract Backed Notes, Series 2017-2. The notes are newly issued asset-backed securities backed by a portfolio of equipment leases and loans.

The transaction is secured by: (1) a portfolio of equipment lease contracts and equipment loan contracts (together, the “Contracts”), together with interests in the related equipment and other collateral; (2) certain portfolio interest certificates evidencing 100% beneficial interest in a portfolio of leases of titled motor vehicles and the related equipment; and (3) equity interests in certain limited purpose entities formed to own aircraft leases and the related aircraft. The underlying Contracts are collateralized by essential use assets in a variety of industries, such as marine, rail, transportation and energy. All of the Contracts were directly or indirectly originated by Stonebriar Commercial Finance LLC.

The aggregate discounted balance (the “ADB”) of the portfolio is approximately $387.2 million. The portfolio is comprised of 83 Contracts to 47 obligors. The average Contract is approximately $4.7 million and the average exposure to an obligor is approximately $8.2 million. The maximum exposure to an obligor is approximately $42.6 million or approximately 11.0% of the ADB. The securitization is based on the projected equipment loan and lease cash flows discounted at a rate of 8.01%.

The transaction benefits from credit enhancement in the form of overcollateralization, excess spread, a reserve account and, with respect to the Class A Notes, Class B Notes, Class C Notes and Class D Notes, subordination.

             
Class     Rating     Initial Principal Balance
Class A Notes     A+ (sf)     $301,848,000
Class B Notes     BBB (sf)     $16,264,000
Class C Notes     BB (sf)     $18,200,000
Class D Notes     B (sf)     $24,977,000
Class E Notes     NR     $12,391,000
       

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 this report.

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

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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

Analytical:
Kroll Bond Rating Agency
Cecil Smart, Jr., 646-731-2381
Senior Director
csmart@kbra.com
or
Anthony Nocera, 646-731-2350
Senior Managing Director
anocera@kbra.com
or
Pauline Christo, 646-731-3397
Director
pchristo@kbra.com

Contacts

Analytical:
Kroll Bond Rating Agency
Cecil Smart, Jr., 646-731-2381
Senior Director
csmart@kbra.com
or
Anthony Nocera, 646-731-2350
Senior Managing Director
anocera@kbra.com
or
Pauline Christo, 646-731-3397
Director
pchristo@kbra.com