A pool of fixed-rate commercial equipment loans and leases will secure the latest asset-backed securities offering from CCG Receivables Trust 2023-1, as it seeks to raise $397 million from investors.
Bank of America Securities is the lead underwriter on the deal, which will issue the notes from a structure that uses subordination as a form of credit enhancement, in addition to a non-declining reserve account and overcollateralization, according to Fitch Ratings' pre-sale report on the deal.
The collateral pool consists of a fairly diverse mix of segments, with the largest being transportation (42.3%), construction (40.1%), waste equipment (10.8%) and machine tools (6.5%), according to Fitch. The rating agency noted that CCG had a solid track record as a loan and lease originator and underwriter, and as a servicer of the financings.
CCG has total initial hard credit enhancement of 17.0%, 12.5% and 7.0% on the classes A, B and C notes, respectively. Hard credit enhancement for classes A and B increased from 15.50% and 10.50%, respectively, from the 2022-1. Otherwise, hard credit enhancement on the class C notes decreased from 7.25%.
Annual excess spread amounts to about 4.68%, a decrease from 9.05% from the CCG 2021-2 deal, according to a pre-sale report from S&P Global Ratings.
S&P expects to assign ratings of 'A-1+' to the A-1 notes; 'AAA' to the A-2 notes; 'AA' to the class B notes; and 'A' on the class C notes. For its part, Fitch expects to assign 'F1+' to the A-1 notes; and similar ratings as S&P throughout the rest of the capital structure.
The most senior notes have a March 14, 2024 legal final maturity dates, according to Fitch, while the remainder of the notes have final maturity dates of Sept. 16, 2030.
