KBRA Assigns Preliminary Ratings to Dext ABS 2023-1, LLC

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to five classes of notes issued by Dext ABS 2023-1, LLC (Dext 2023-1), an equipment ABS transaction.

Dext 2023-1 represents the third equipment ABS transaction to be sponsored by Dext Capital, LLC (Dext). Dext, founded in 2018 and headquartered near Portland, Oregon, is an independent equipment finance company focused primarily on financing medium- and small-ticket medical equipment.

As of the February 28, 2023 statistical cutoff date, the pool of equipment contracts backing Dext 2023-1 has an aggregate contract principal balance of $306.1 million, based on a 9.6% discount rate (Statistical Pool). The Statistical Pool includes 1,564 contracts, with an average contract balance of $195,723 and original and remaining lease term of 54 months and 47 months, respectively. The aggregate undiscounted residual value is equal to $7.0 million or 2.29% of the aggregate contract principal balance. The majority of the Statistical Pool is made up of contracts financing medical equipment. The top four obligors have concentrations greater than 2.0% each, with the top obligor representing 8.0%. This obligor is a multi-state healthcare system with high investment-grade credit characteristics. The Statistical Pool is diversified geographically with the largest state, Florida, representing approximately 19.2% and all other states at less than 12.4% each. The Statistical Pool benefits from a weighted average obligor time in business of 22.1 years.

Dext ABS 2023-1 will issue five classes of notes. Credit enhancement is comprised of overcollateralization, a cash reserve, subordination benefiting senior classes and excess spread. The overcollateralization is subject to a target equal to 5.50% of the initial aggregate contract principal balance and is non-amortizing after reaching this target level. The reserve account is funded at 1.00% of the initial aggregate contract principal balance and is non-amortizing.

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Related Publications

• Equipment Lease and Loan Global ABS Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.