The Barings Equipment Finance platform is returning to the capital markets to sell $1 billion in bonds secured by equipment loan and lease payments.
Sponsored by MassMutual Asset Finance, the series 2026-A will issue notes through five tranches of notes, mostly class A, according to Fitch Ratings and Kroll Bond Rating Agency, which assessed the deal.
All four class A notes benefit from credit enhancement levels representing 9.60% of the pool balance, and 0.70% on the class B notes, according to Fitch and KBRA.
A closer look at the asset pools shows a diverse pool and with dependable obligors, boosting the credit quality of the portfolio. MMAF 2026-A's aggregate securitization value (ASV) includes 363 contracts to 103 obligors, with an average contract of $2.85 million, and average obligor exposure of $10 million.
The largest single obligor exposure is to the U.S. government for $146.8 million or 14.19% of the aggregate securitization value (ASV), KBRA said. Fitch said the government exposure is primarily for energy equipment.
Fitch notes that MMAF buys the contracts in the underlying pool from approved syndicators, but does not originate them. The rating agency views MMAF as an adequate underwriter and servicer, demonstrated by the managed portfolio's strong historical performance. Also, previous securitizations have experienced minimal delinquencies and losses to date, the rating agency said.
Obligor concentration is also decreasing overall, Fitch said, which strengthens the collateral's credit characteristics. The exposure to the largest customer is 14.2%, compared with the 18% average for the platform, Fitch said.
Fitch assigns ratings of F1+ to the A1 notes; and AAA to the A2 through A4 notes. KBRA assigns K1+ to the A1 notes; AAA to the A2 through A4 tranches and A to the class B notes.
Asset Securitization Report's deal database notes that Moody's Ratings assigns P1 to the A1 notes and Aaa to the A2 through A4 notes.
