Equipment ABS: Positioned to Outperform Despite Mixed Signals

Research evidence excerpt

Equipment ABS: Positioned to Outperform Despite Mixed Signals

bit 2, Exhibit 36.

Equipment ABS credit trends remain mixed, with improving delinquencies in small- and Spreads: Exhibit 7 to Exhibit 9

mid-to-large ticket sectors offset by weaker A&C performance. Recent platform-level

results were negative for A&C and large-ticket ABS, while small- and medium-ticket Click Links to Must Read Reports

performance was mixed. Vintage performance also remains uneven, with 2024 vintages Overview reports

2026 Year Ahead Outlook (ABS), 2Hshowing comparatively higher cumulative losses, particularly in the mid-to-large ticket

2026 Outlook, 1H 2026 Review,sector. We continue to favor small-ticket equipment ABS given its diversified collateral

1Q26 new issue volume, Total andpools and historically resilient performance.

Excess returns, ABS Ratings Actions

Despite headwinds equipment financing remains resilient Market Updates

The equipment financing sector faces several headwinds, including trade policy Consumer credit scorecard

uncertainty, elevated interest rates, and geopolitical risks that could pressure inflation Payment water, Under the hood of

and supply chains. However, these challenges are partially offset by meaningful support auto loan ABS, Auto ABS, Credit

from the OBBBA. Combined with our economists' expectations for continued U.S. and card ABS, Personal loan ABS, Solar

global economic growth, the overall outlook for equipment demand remains constructive ABS, FFELP & private student loan

despite a mixed operating environment. ELFA reported record-pace growth, although ABS, Timeshare ABS,

small business sentiment is pressured by inflation and labor challenges while banks Aircraft ABS, Container ABS, Digital

modestly tighten C&I lending standards.