KBRA released its Equipment Loan & Lease indices for December 2021.
December remittance reports showed credit performance weakened across most securitized equipment loan and lease pools during the November collection period. Annualized net losses in KBRA’s headline Equipment Loan & Lease Index turned positive for the first time since June 2021—rising to 0.06 percent or up 24 basis points (BPS) month-over-month (M/M) but down 15 bps year-over-year (Y/Y)—as gross charge-offs and loan severity rates edged slightly higher.
The percentage of accounts 60+ days past due also rose during the month, coming in at 0.84 percent (up 19 BPS M/M and 9 BPS Y.Y).
The increase in delinquencies was driven primarily by the Small-Medium Ticket and mostly
in pools with significant concentrations of stronger credit quality obligors. Collateral pools of this type will periodically exhibit administrative delinquencies when, for example, larger obligors’ payments are delayed as offices close during holiday periods.
These administrative delinquencies are generally not indicative of credit issues and typically cure before aging into defaults.
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