ABS

The proportion of construction equipment in the pool is the highest compared with other Kubota Credit transactions, which is a potential weakness.

The six biggest banks in the U.S. are expected to sell between $28 billion and $32 billion of new bonds after they report quarterly earnings, and regional banks — seeking to raise more capital — could be right behind them.

The issue is secured by a revolving pool of term and line-of-credit small-business loans made to a diverse set of industries.

The unsecured loans are generated on marketplace lending platforms using proprietary technology that use artificial intelligence and machine learning software.

Credit enhancement is lower for all classes relative to the Sierra Timeshare 2023-1, except for class C, and that was because of lower overcollateralization and lower subordination.

The notes have a coupon of 7.1%, a FICO score of 728 an original cumulative loan-to-value ratio of 66.9%, and an issuer debt service coverage ratio of 1.26%.

The loans coming across their desks include car debt and personal loans, from consumer lenders including LendingPoint, Best Egg and Upstart Holdings Inc., as well as regional banks.

The fourth issuance of the year includes receivables from 36-month contracts, a collateral type that still has limited performance history. VSMT 2023-4 also has a 36-month revolving period.

The prime collateral shows a pool of geographically diversified, well-seasoned accounts with an average balance that is a little below pre-pandemic levels, with 21% in subordination credit support.

No Customers-originated loans were in the UPST 2023-2 pool, but Customers loans are eligible for inclusion during the pre-funding period that ends 60 days after the deal's closing date.