A pool of leases and loans on commercial equipment loans and leases will secure $458.6 million in asset-backed securities (ABS) from CCG Receivables Trust, 2024-1.
The transaction, known as CCGRT 2024-1, will issue notes through five tranches of classes A, B, C and D notes, according to Moody's Ratings and Fitch Ratings. The most senior notes, class A1, have a legal final maturity date of August 14, 2025, but otherwise the rest of the notes in the transaction have a legal final maturity date of March 15, 2032.
Scheduled to close in about a week, CCGRT will price all its notes to the three-month interpolated yield curve, according to Asset Securitization Report's deal database. The A1 notes, with P1 and F1+ ratings from Moody's and Fitch, respectively, are expected to price at par, yielding 5.4%. Otherwise, the notes are expected to see yields ranging from 5.0% on the A2 tranche—Aaa/AAA from Moody's and Fitch, respectively—to 5.8% on the Baa2/BBB from Moody's and Fitch.
Fitch notes that the collateral 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. Those industries, respectively, account for 41.5%, 38.0% and 6.3% of the collateral pool's balance. Loans accounted for 97.1% of the pool, and on average, the contracts had a balance of $199,795, the rating agency said. Broken down by obligor, the average balance was $206,422.
Moody's notes that, on a positive credit note, the contracts have a weighted average original term of about 53.4 months, and the remaining term of 46.3 months. Also, CCG and KEF's historical managed portfolio net loss rates are very low when compared to defaults due to high recovery rates.
A senior/subordinate repayment structure, overcollateralization, a cash reserve account and excess spread all confer credit enhancement to the notes. Total hard credit enhancement ranged from 17.3% on the A notes to 4.7% on the class D notes, according to Moody's.
Aside from the previously mentioned notes, Moody's assigned ratings of Aa2 to the class C tranche and Baa2 to the class D notes.
