Esoteric

The notes will repay investors sequentially, after a two-year revolving period. That's when proceeds from principal payoffs can be reinvested in the deal through newly originated loans added to the pool.

The pool consists of 2,384 contracts that Commercial Credit Group (CCG) and Keystone Equipment Finance (KEF) have extended to a customer base in the transportation, construction and waste industries.

The final maturity date is set in relation to the final payment of the notes in the most stressed scenarios, respectively, which is a departure from prior issuances.

The A1, 2, and 3 bonds will be repaid sequentially and do not benefit from subordination. There is a capital subaccount that provides sufficient funds to offset typical variance in collections.

Should the reserve account require more funding, the transaction can draw on a letter of credit from Bank of Nova Scotia, to be draw upon in case of monthly liability shortfalls or other covenant events.

Yields on the notes are expected to range from 6.0% on the A-rated tranche to 11.4% on the BB- tranche, maturing in July 2024.

Royalty revenues account for virtually all the program's incoming securitized collections, at 95.5%, with fees on initial contracts and other income accounting for 4.5%.

Conventional trucks with sleeper compartments make up the largest exposure to the collateral, with a 24.3% slice of the pool, and virtually all of the 3,549 underlying contracts are backed by personal guarantees.

The wireless infrastructure industry has positive fundamentals, with all major U.S. carriers making further network infrastructure investments to boost coverage and capacity to meet growth in wireless data traffic.

Incremental to a $1.8 billion global revolving credit facility completed in May, it could boost the company's lender-driven debt capital capacity to $9.7 billion in total.