A portfolio of equipment lease and loan contracts will secure $840.9 million in forthcoming notes from the transaction MMAF 2022-1, a wholly owned subsidiary of MassMutual Asset Finance.
The leases and loan contracts represent a litany of equipment for a range of industries including transportation, telecommunications, construction and mining, according to a pre-sale report from Kroll Bond Rating Agency. Other equipment includes computers, medical equipment, material handling, vending, corporate aircraft, software and energy management.
J.P. Morgan Securities is an initial note purchaser, along with SG Americas Securities, and BofA Securities.
MassMutual Asset Finance will also act as servicer, custodian and administrator of the notes, KBRA said. KBRA expects to assign K1+ ratings to the $234 million, A-1 notes; and ‘AAA’ to the rest of the three classes of notes.
In at least one key change from the MMAP 2021-A, the collateral is more diversified by obligor. The top obligor and the top five obligors represent 8% and 35% of the collateral’s aggregate securitization value (ASV), respectively. ASV represents the discounted value of the collateral’s cash flow, KBRA explained. In MMAF 2021-A, those concentrations were 15% and 50%, respectively.
In another difference, the MMAF 2022-1 had a significantly lower average ASV than the previous deal, by receivables. MMAF 2022-1 has an average ASV of $2.2 million, down from $4.2 million on the 2021-A.
Both deals had almost comparable overall securitization values topping $900 million. MMAF 2022-1, however, had a much higher number of receivables, 414, compared with the 225 in MMAF 2021-A.
Average ASV by obligor was similarly much lower, at $12.4 million, down from $23.2 million.
Also on the basis of securitization value, Texas represents the largest state in the pool, with 23.8%, and Washington follows with 10.8%. The rest of the top five have single-digit representation in the pool. By equipment type, transportation was the largest asset class by far, with 51.7%, followed by telecommunications, at 9.8%. The pool is a little more diverse by industry, with telecommunications accounting for 15.9% of securitization value, followed by the beverage, food and tobacco, with 14.9%.
