DBRS Assigns Provisional Ratings to the Notes to Be Issued by Engs Commercial Finance Trust 2016-1

DBRS, Inc. (DBRS) has today assigned provisional ratings to the following classes of notes to be issued by Engs Commercial Finance Trust 2016-1 (Issuer):

-- $36,000,000, Series 2016-1, Class A-1 Notes rated R-1 (high) (sf)
-- $134,971,000, Series 2016-1, Class A-2 Notes rated AAA (sf)
-- $10,953,000, Series 2016-1, Class B Notes rated AA (sf)
-- $8,971,000, Series 2016-1, Class C Notes rated A (sf)
-- $7,690,000, Series 2016-1, Class D Notes rated BBB (sf)

The ratings are based on DBRS’s review of the following analytical considerations:

-- Form and sufficiency of available credit enhancement and its ability to withstand the expected losses under various stressed cash flow modeling scenarios.

-- While the structure allows for an approximately three-month prefunding period, during which time the acquisition by the Issuer of new loans into the collateral pool will be permitted, the proposed concentration limits will mitigate the risk of material migration in the collateral pool’s composition or risk profile.

-- The assets in the pool primarily consist of new and used transportation equipment, including trucks, trailers and transportation-related equipment. After the prefunding period, no less than 65% of the outstanding pool balance will be for new equipment, and not more than 64% will be for loans related to trucks.

-- DBRS deems Engs Commercial Finance Co. to be an acceptable originator and servicer of equipment-backed loans. In addition, Wells Fargo Bank, National Association, which is an experienced servicer of equipment loan-backed securitizations, will be the backup servicer for the transaction.

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

The applicable methodology is Rating U.S. Equipment Lease and Loan Securitizations (June 2015), which can be found on our website under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

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

The full report providing additional information and analytical detail is available by clicking on the link under Related Research at the right of the screen 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.