Finance

C$14.1 billion in purchases of federal government debt led the foreign inflows, as well as a C$6.6 billion investment in securities of government corporations and business enterprises.

The transaction could be upsized to $1.3 billion in issuance, supported by fixed-rate loans on mostly new agricultural equipment.

Spreads are expected to come in at 120 basis points over the 3M, I-Curve on the A1A notes and then range from 185 bps—425 bps over the 3M, I-Curve on the class B through class D notes.

Prime quality auto loans secure the pool, although recent rapid origination growth put some strain on and deterioration on the notes in the 2022 and 2023.

KKR has been rapidly seeking to expand its asset-based financing business, which has about $48 billion in assets since starting up in 2016.

Federal Reserve Chair Jerome Powell last week suggested the central bank is getting close to the confidence it needs to start lowering interest rates.

Spreads are expected to come in ranging from 15 basis points over the 3M I-Curve on the A1 notes to 160 bps over the benchmark on the class D notes.

The inclusion of reclassified HECMs was seen as a potential credit shortcoming, as a small number had exceptions that are potentially meaningful, such as an expired or unapproved appraisal.

Vervent acts backup servicer, which will first make pro rata payments to the administrator and servicers. Then CRB 2024-1G will repay interest and principal to investors on a senior-subordinate basis.

Diversification is just one of the deal's strengths, which includes higher excess spread than comparable floorplan transactions. The largest dealer accounts for 0.72% of the pool balance.