A pool of large-ticket loans and lease contracts will secure $1 billion in asset-backed securities, in a deal that Mass Mutual Asset Finance is sponsoring.
Bonds will be issued through the Barings Equipment Finance 2026-B series of notes, according to analyst at Fitch Ratings and Kroll Bond Rating Agency.
KBRA notes that in the Barings 2026-A, the class B notes carry an AA+ rating, compared with A in the 2026-A deal.
In another change, the 2026-B notes have a total initial hard credit enhancement of 10.00%, compared with 9.60% from the previous deal, the 2026-A, KBRA said.
The transaction will issue the series 2026-B notes through six tranches of classes A, B and C, according to Fitch and KBRA. Classes A1, A2 and A3 have legal final maturity dates of Oct. 13, 2027, Jan. 14, 2030, and May 15, 2034, respectively. Classes A4, B and C all have the same maturity date, July 15, 2052.
Classes A1 through A4 benefit from credit enhancement levels of 10.0%, while classes B and C have credit enhancement levels of 3.60% and 0.60%.
The deal will repay principal sequentially, from A1 through C, the rating agencies said, adding that J.P. Morgan Securities and
The pool of notes is secured by 329 contracts extended to 100 obligors, each with an average balance of $3 million. The collateral pool is split almost evenly between loans and finance leases, accounting for 50.02% and 49.98%, respectively.
On a weighted average (WA) basis, the contracts had an original term of 114 months, with 83.4 months remaining, Fitch said.
As for the industries represented among the collateral contracts, transportation represents the top collateral type, accounting for 63.13% of the pool, KBRA said.
After transportation, federal energy equipment, software, machinery and equipment and rail equipment round out the top five collateral types, accounting for 15.15%, 5.42%, 3.45% and 2.75%, respectively, according to Fitch.
When broken down by industry, the pool looks even more diversified, as the beverage and food industry is the largest industry, accounting for 17.61% of the pool, KBRA said.
KBRA assigns K1+ to the class A1 notes; AAA to classes A2 through A4; AA+ to the class B notes and AA- to the class C notes. Fitch assigns F1+ to the class A1 notes; and AAA to classes A2 through A4.
