KBRA Assigns Preliminary Ratings to Crockett Partners Equipment Company IIA LLC
July 25 2024 - 1:17PM
Business Wire
KBRA assigns preliminary ratings to three classes of notes
issued by Crockett Partners Equipment Company IIA LLC (the Issuer),
an equipment rental ABS transaction.
The transaction represents Crockett Partners Fund I, LP’s
(Sponsor or Fund) and EquipmentShare.com Inc.’s (EQS or Equipment
Manager), first equipment rental ABS transaction. The notes are
supported by an amortizing pool of collateral, which as of the May
31, 2024 statistical cutoff date, has 8,975 equipment and an
aggregate net book value (ANBV) of approximately $498.0 million.
The portfolio is primarily comprised of nine different equipment
types from ten different manufacturers comprising approximately 99%
and 88%, respectively, of the collateral as a percentage of
ANBV.
The Sponsor owns a special purpose vehicle, Crockett Partners
Equipment Company II, LLC (Crockett), which sells a pool of
equipment to the Issuer at closing. The equipment is rented to end
users by EQS under an equipment management agreement. The Sponsor
was formed in 2022 and is controlled by 1819 Partners, LLC, a
Memphis-based private investment firm. EQS was founded in 2015 and
is one of the largest equipment rental companies in the U.S.,
renting out its own equipment as well as managing rentals of
equipment owned by third parties (OWN Program). As of March 31,
2024, EQS had 240 locations in 41 states and had $5.7 billion in
original equipment cost (OEC) under management, including $2.0
billion under the OWN Program.
The Transaction is secured by the equipment owned by the Issuer.
EQS manages the Issuer’s equipment and has also entered into a
lease with the Issuer pursuant to which EQS pays the Issuer a lease
payment equal to a substantial portion of rental payments generated
by the equipment and receives from the Issuer maintenance and
servicing platform fees. The lease payments are the initial source
of funds for payments to the noteholders. If the lease payments
generated by the equipment rentals are insufficient to make
scheduled payments on the notes, including principal payments to
maintain the required overcollateralization, or certain other
events occur, a Liquidation Event will occur. This will require the
equipment to be liquidated with the proceeds used to make the
required payments to the noteholders.
To access rating and relevant documents, click here.
Click here to view the report.
Methodologies
- ABS: General Global Rating Methodology for Asset Backed
Securities
- Structured Finance: Global Structured Finance Counterparty
Methodology
- ESG Global Rating Methodology
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 are 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.
Doc ID: 1005225
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Analytical Contacts
Kenneth Martens, Senior Director (Lead Analyst) +1 646-731-3373
kenneth.martens@kbra.com
Zara Shirazi, Managing Director +1 646-731-3326
zara.shirazi@kbra.com
Eric Neglia, Head of Commercial and Consumer ABS +1 646-731-2456
eric.neglia@kbra.com
Zachary Lee, Analyst +1 646-731-1252 zachary.lee@kbra.com
Joanne DeSimone, Managing Director, ABS Commercial (Rating
Committee Chair) +1 646-731-2306 joanne.desimone@kbra.com
Business Development Contact
Arielle Smelkinson, Senior Director +1 646-731-2369
arielle.smelkinson@kbra.com