DBRS Assigns Provisional Rating to Nations Equipment Finance Funding III, LLC – Equipment Contract Backed Notes, Series 2016-1 Class A

DBRS, Inc. (DBRS) has today assigned a provisional rating of A (sf) to Class A of the Equipment Contract-Backed Notes, Series 2016-1 (the Class A Notes) issued by Nations Equipment Finance Funding III, LLC (the Issuer).

The provisional ratings are based on a review by DBRS of the following analytical considerations:

-- Subordination, overcollateralization and cash reserve create credit enhancement of 24.5% (as of the Cut-Off Date), which is sufficient to withstand cash flow modeling stresses commensurate with an “A” rating for the Class A Notes.
-- Sequential amortization of the Notes and limited release of the excess cash flows to the Issuer are expected to create increasing credit enhancement for the most senior Class A Notes over the life of the transaction.
-- Nations Equipment Finance, LLC (NEF) is well capitalized with equity support and revolving bank funding available in form of a $255 million senior credit facility. The Originator has been profitable since its inception.
-- NEF’s management team consists of seasoned members with extensive equipment leasing experience developed during their tenure with GE Capital.
-- The pool is relatively more diversified compared with similar transactions considering both obligor and industry concentrations.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.

Notes:
All figures are in U.S. dollars unless otherwise noted.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodology is Rating U.S. Equipment Lease and Loan Securitizations, which can be found on our website under Methodologies.

The full report providing additional analytical detail is available by clicking on the link or by contacting us at info@dbrs.com.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.