DBRS Finalizes Provisional Ratings on Earnest Student Loan Program 2016-C LLC

DBRS, Inc. (DBRS) has today finalized its provisional ratings on the following classes issued by Earnest Student Loan Program 2016-C LLC (EARN 2016-C):

-- Series 2016-C, Class A-1 rated AA (low) (sf)
-- Series 2016-C, Class A-2 rated AA (low) (sf)
-- Series 2016-C, Class B rated BBB (sf)

The finalized ratings are based on a review by DBRS of the following analytical considerations:

-- The transaction’s form and sufficiency of available credit enhancement.
-- The quality and credit characteristics of the student loan borrowers.
-- Structural features of the transaction that require the Class A Notes to enter into full turbo principal amortization if certain performance triggers are breached or if credit enhancement deteriorates.
-- Earnest’s capabilities in regard to originations, underwriting and servicing.
-- The benefits offered by the existence of a hot backup servicer.
-- The legal structure and legal opinions that address the true sale of the student loans, the non-consolidation of the trust and that the trust has a valid first-priority security interest in the assets, and consistency with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.

The variable-rate Class A-1 Notes are primarily secured by a group of variable-rate loans. The fixed-rate Class A-2 Notes are primarily secured by a group of fixed-rate loans. The Class B Notes are secured by both the fixed-rate and variable-rate loan groups.

EARN 2016-C uses a traditional pass-through structure, with credit enhancement consisting of overcollateralization, a separate reserve account for each class of Class A Notes, a liquidity account for the Class B Notes, subordination provided by the Class B Notes for the benefit of the Class A Notes, excess spread and limited cross-collateralization.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating U.S. Private Student Loan Securitizations, which can be found on our website under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.

The full report providing additional information and analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.