KBRA Assigns Preliminary Ratings to Verdant Receivables 2023-1 LLC

KBRA assigns preliminary ratings to five classes of notes issued by Verdant Receivables 2023-1 LLC (Verdant 2023-1), an equipment ABS transaction.

Verdant Commercial Capital, LLC (Verdant or the Company) is a small- and medium-ticket independent equipment finance company founded in July 2017 and headquartered in Cincinnati, Ohio. Verdant employs a vendor model generating originations through relationships with original equipment manufacturers, distributors and resellers. Verdant 2023-1 represents the Company’s first public equipment ABS transaction. The Verdant 2023-1 transaction is secured by a portfolio of equipment lease and loan contracts, together with interests in the related equipment.

As of June 30, 2023, the statistical calculation date, the pool of equipment contracts backing Verdant 2023-1 has an aggregate discounted contract balance of $264.79 million, based on the statistical discount rate of 8.34%. The aggregate discounted contract balance represents the aggregate present value of the expected cashflows on each contract, discounted at the greater of the discount rate or the individual contract rate. The initial cut-off date will be July 31, 2023. Credit enhancement is comprised of overcollateralization, a cash reserve, subordination benefiting senior classes, and excess spread.

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Related Publications

• Equipment Lease and Loan Global ABS Methodology
• 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.

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