KBRA Assigns Preliminary Ratings to Dext ABS 2020-1, LLC

·3-min read

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Dext ABS 2020-1, LLC, an equipment ABS transaction.

Dext Capital, LLC (Dext), founded in 2018 and headquartered near Portland, OR, is an independent equipment finance company focused primarily on financing medium- and small-ticket medical equipment. The transaction represents Dext’s first ABS transaction. As of September 30, 2020, the pool of equipment contracts backing the Transaction ("Statistical Pool") has a discounted pool balance of $112.26 million, based on a 7.4% discount rate. While the Statistical Pool does not represent the final pool of collateral to be sold on the closing date of the transaction, it is anticipated that the final pool will have characteristics substantially similar to the Statistical Pool.

Dext ABS 2020-1, LLC will issue four classes of notes. Credit enhancement is comprised of overcollateralization, a cash reserve, subordination benefiting senior classes and excess spread. The overcollateralization is subject to a target equal to 5.9% of the initial pool balance and is non-amortizing after reaching this target level. The reserve account is funded at 2% of the initial pool balance and is non-amortizing.

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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 U.S. Information Disclosure Form 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 U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. 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 and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.

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