NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes (the “Notes”) anticipated to be issued by Chesapeake Funding II LLC (see preliminary ratings listed below).
The transaction represents the seventh term ABS issuance for Element Fleet Management Corp. (“Element” or the “Company”) through Chesapeake Funding II LLC (“Chesapeake II”). There are six additional term series of notes issued by Chesapeake II under the base indenture and all will remain outstanding on the expected closing date of the Series 2018-2 Notes (the “2018-2 Notes”). The Series 2018-2 Notes issued by Chesapeake II will be primarily supported by i) leases and related vehicles originated by Element Fleet Corporation (“EFC”) and allocated to one or more special units of beneficial interest (“SUBIs”) and ii) fleet loans made by the Issuer to Chesapeake Finance Holdings II LLC. 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. The leases and vehicles supporting the Series 2018-2 Notes are a shared pool of leases allocated to SUBI-2 or DLPT Lease SUBI, which also support other series of notes issued from Chesapeake II. As of May 31, 2018, the collateral has an initial receivables balance of $6.17 billion.
Credit enhancement for the Notes consists of overcollateralization, subordination and a reserve account funded on the closing date.
| Class | Preliminary Rating | Initial Principal Balance | ||||||||||
| Class A-1 Notes | AAA (sf) | $277,580,000 | ||||||||||
| Class A-2 Notes | AAA (sf) | $277,580,000 | ||||||||||
| Class B Notes | AA (sf) | $17,000,000 | ||||||||||
| Class C Notes | A (sf) | $13,920,000 | ||||||||||
| Class D Notes | BBB (sf) | $13,920,000 | ||||||||||
KBRA analyzed the transaction using the General Rating Methodology for Asset-Backed Securities published on November 28, 2017.
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.
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 available here.
Related Publications: (available at www.kbra.com)
- Chesapeake Funding II LLC, Series 2018-2, Pre-Sale Report
- Global General Rating Methodology for Asset-Backed Securities
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
