KBRA Assigns Preliminary Ratings to CP EF Asset Securitization I, LLC, Series 2022-1


NEW YORK–(BUSINESS WIRE)–KBRA assigns preliminary ratings to three classes of bonds issued by CP EF Asset Securitization I, LLC, Series 2022-1 (“CPEF 2022-1”), an ABS equipment transaction.

CPEF 2022-1 represents the first ABS equipment from Channel Partners Capital, LLC (“CPC” or the “Company”) following the Company’s inaugural ABS transaction, CPC Asset Securitization I Series 2021-1 (“CPC 2021-1” ) in December 2021. CPC 2021-1 was secured by small business loans and business cash advances. The company, which was founded in 2009, has focused on providing point-of-sale working capital to small businesses for the first ten years of its history. This strategy has led CPC to work and develop relationships with equipment financing partners.

Starting in 2020, CPC launched its own equipment finance offering. Arrangements come from CPC’s network of equipment finance company partners, who refer business to CPC for working capital financing as well as equipment financing. CPC generally funds originations that its partners are unable to finance, and the current portfolio consists primarily of the following: 1) Originations that exceed the risk-based portfolio concentration limits for a partner (e.g., obligor or sector limits) 2) arrangements that do not match a partner’s credit strategy and 3) broker arrangements.

The discounted pool balance represents the present value of the projected cash flows of contracts included in the collateral pool using a discount rate based on the interest rate on the notes plus fees and other amounts. As of May 31, 2022, based on a discount rate of 9.13%, the discounted balance of the pool is $147.6 million (“statistical pool”). The transaction also includes a pre-funding account of approximately $33.2 million that can be used to purchase additional contracts during the three-month period following the closing date.

CPEF 2022-1 will issue three classes of tickets. Credit enhancement includes excess spread, reserve account, overcollateralization and subordination for higher classes. Overcollateralization is subject to a target equal to 22.75% of the current pool balance and a floor equal to 0.50% of the initial pool balance. The reserve account is funded at 1.00% of the initial pool balance and is not amortizable.

Click here to see the report. To access relevant notes and documents, click here.

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Further information on key credit considerations, sensitivity analyzes which look at factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a driver key to the change in credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially significant sources that were used to prepare the credit rating and information on the methodology(ies) (including all significant models and sensitivity analyzes of the main relevant rating assumptions, the where applicable) used to determine credit rating are available in the information disclosure form(s) located here.

Information on the meaning of each rating category can be found here.

Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available at www.kbra.com.

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Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a rating agency with the UK Financial Conduct Authority under the temporary registration scheme. In addition, KBRA is designated as the Designated Rating Agency 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.


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