Securitization

With a shifting pool mix, concentration limits and other restrictions applied to the new assets, Fitch gives the overall deal a 15.2% base case default expectation.

OWN Equipment Fund has nine different equipment types that make up 96.39% of the pool's Net Orderly Liquidation Value (NOLV).

There is also a significant portion of mortgages secured by investment properties, 44%, and overall 47.5% of the collateral pool is composed of non-qualified mortgages.

The notes will be repaid sequentially, and with subordination, a reserve account that can be replenished and overcollateralization, the notes receive greater credit enhancement over time.

The industry's biggest opportunities involve the evolving cost of capital, which will shift funding sources from the private, local lending markets to institutional sources.

The deal includes a replenishment mechanism that allows subsequent drawdowns on existing mortgages.

The deal was divided into multiple debt pieces rated by Kroll Bond Rating Agency as well as a riskier first-loss piece.

A cumulative net loss trigger and a material modified loan ratio trigger will direct all available funds to the note principal payment if they are breached.

All the notes benefit from credit enhancement equaling 4.75% of the note balance, an initial reserve account representing 0.50% of the pool balance.

ExteNet's capital structure maintains cash flow by including cash trapping and cash sweeping conditions.