A pool of retail installment contracts on new and used agricultural and construction equipment will secure $398.4 million in asset-backed bonds being offered through the CNH Capital Canada Receivables Trust, 2024-1.
In the program's first deal of the year, CNH Capital will offer notes through two tranches of class A notes, both of which will benefit from total hard credit enhancement representing 4.10% of the total balance and an initial reserve representing 2.0% of the pool balance, according to ratings analysts from Moody's Investors Service. BMO Nesbitt Burns, CIBC World Markets and RBC Dominion Securities are underwriters on the deal, Moody's said, and the credit enhancement takes the form of a liquidity layer from a 2.00% spread account, and 2.10% in overcollateralization.
CNH Industrial Capital Canada sold the underlying contracts into CCCRT 2024-1, about 2,171, and the company is also servicer on the deal, Moody's said. On a weighted average (WA) basis, the contracts have an original term of 62.6 months, with a remaining WA term of 56.4 months, according to the rating agency. Analysts also note that the pool has an average statistical contract value of $192,286. A sizeable majority of the loans, 80%, are on monthly or annual payment frequencies, Moody's said.
The pool is fairly concentrated geographically, with the top three provinces accounting for 80.2% of the pool, Moody's said. By obligor, however, the collateral pool is very fragmented. The top obligor, for instance, accounts for only 0.84% of the pool by balance, while the top five obligors represent 3.66%, Moody's said.
Moody's assigns ratings of Aaa to both the A1 and A2 classes of notes, and that they have legal final maturity dates of March 15, 2007 and Aug. 15, 2031.
