NEW YORK–KBRA assigns preliminary ratings to four classes of notes issued by VFI ABS 2023-1, LLC (VFI 2023-1), an equipment ABS transaction.
Varilease Finance, Inc. (VFI or the Company), founded in 2001 and headquartered in Salt Lake City, Utah, is an independent equipment finance company focused on leasing industrial and commercial equipment to upper-and middle-market businesses. VFI 2023-1 represents the company’s second equipment ABS transaction. VFI provides funding in two phases: progress funding while equipment is being set up and delivered and then base term leases when the equipment is in place. VFI has grown its managed portfolio while employing a consistent underwriting policy.
VFI 2023-1 will issue four classes of notes. Credit enhancement is comprised of over-collateralization (O/C), a cash reserve, a capitalized interest account, subordination benefiting senior classes, and excess spread. The O/C is subject to a target equal to 5.75% of the current pool balance and a floor equal to 1.25% of the initial pool balance. The reserve account is funded at1.50% of the initial note balance (1.46% of the pool balance as of the initial cut-off date) and is non-amortizing.
Disclosures
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales, and disclosures is available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short-form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.
