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North Mill Equipment Finance Closes $353MM Term Securitization

October 18, 2022, 07:25 AM
Filed Under: Industry News

North Mill Equipment Finance LLC (NMEF) announced the closing of its sixth commercial equipment backed securitization (ABS), NMEF Funding 2022-B. The $353 million transaction is North Mill’s second ABS transaction this year, bringing the total privately placed bond proceeds raised this year to $724 million for the year. NMEF’s Capital Markets team has now raised $1.4 billion in bonds since inception.

NMEF 2022-B featured fixed-rate asset backed securities across three classes of notes with the A note split into two tranches; an A-1 money market class; and a AAA/Aaa rated tranche by KBRA/Moody’s. This was NMEF’s first ABS issuance to be rated by Moody’s. It was also NMEF’s first transaction to include all investment grade tranches.

“The transaction was well-received by institutional investors with 31 unique investors, including 12 new investors in the NMEF shelf, making it NMEF’s largest ABS investor base of all time. We attribute this to the addition of a big-three rating agency with a 4 percent base case cumulative net loss assumption as well as a reduction of the base case loss assumption from KBRA from 6.1 - 6.6 percent on our last transaction down to 4.79 percent on NMEF 2022-B,” said Mark Bonanno, North Mill’s President and Chief Operating Officer.
Pier Snider, NMEF’s Chief Financial Officer, added, “The transaction includes a $101 million three-month post-close prefunding period that gives NMEF a fixed cost of funds for fourth quarter originations in a rising rate environment.”

North Mill Equipment Finance originates and services small to mid-ticket equipment leases and loans, ranging from $15,000 to $1,000,000 in value.

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