KBRA assigns preliminary ratings to seven classes of notes issued by Auxilior Term Funding 2023-1, LLC (Auxilior 2023-1) and equipment ABS transaction.

Auxilior 2023-1 represents Auxilior Capital Partners, Inc.’s (Auxilior or the Company) first equipment ABS. Auxilior is an independent finance company founded in 2020 and located in Plymouth Meeting, PA. The Company provides financing to small- and medium-sized businesses in three finance program groups: construction and infrastructure group, transportation and logistics group and franchise finance group. Auxilior’s management team has significant experience founding and growing commercial finance companies. The originations strategy is vendor-focused, using managements’ relationships with vendors and manufacturers to develop private label and sales-catalyst programs. Auxilior is privately held, primarily by Mizuho Financial Group, a large global bank, Marubeni Corporation, a global fortune 500 company and Patriot Financial Partners, a private equity firm specialized in investing in North American banks. As of September 30, 2023, Auxilior’s portfolio totaled $1.2 billion in net investment across 5,551 contracts and 4,437 customers.

Auxilior 2023-1 will issue seven classes of notes, including a short term money market tranche. Credit enhancement includes a reserve account, overcollateralization, subordination for senior classes and excess spread. The aggregate securitization value of the portfolio as of October 31, 2023 is $386.39 million (Cutoff Date ASV). The Cutoff Date ASV is based on the projected loan and lease cash flows, as well as the residual value of the related equipment, discounted at a statistical discount rate of 10.20%. The Cutoff Date ASV includes 3,760 contracts for an average Cutoff Date ASV of $102,762.

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Related Publications

• Equipment Lease and Loan Global ABS Methodology
• ABS General Global Rating Methodology for Asset-backed Securities
• 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.

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