DBRS Assigns Provisional Ratings to NextGear Floorplan Master Owner Trust, Series 2016-2

DBRS, Inc. (DBRS) has today assigned provisional ratings to the following notes (the Notes) issued by NextGear Floorplan Master Owner Trust, Series 2016-2:

-- Series 2016-2 Notes, Class A-1 rated AAA (sf)
-- Series 2016-2 Notes, Class A-2 rated AAA (sf)
-- Series 2016-2 Notes, Class B-1 rated A (sf)
-- Series 2016-2 Notes, Class B-2 rated A (sf)

Class A will be offered as floating-rate and fixed-rate classes, Class A-1 and Class A-2, respectively. The combination of Class A-1 and Class A-2 is expected to equal $300,000,000. Class B will be offered as floating-rate and fixed-rate classes, Class B-1 and Class B-2, respectively. The combination of Class B-1 and Class B-2 is expected to equal $28,012,000.

The ratings are based on DBRS’s review of the following analytical considerations:
-- The transaction parties’ capabilities with regard to originations, underwriting and the servicing and financial strength of the sponsor/servicer, NextGear Capital Inc. (NextGear).
-- The managed portfolio is currently well diversified. There are a variety of concentration limits within the structure to protect the Notes from a material shift in collateral mix.
-- Performance and quality of the pool of wholesale receivables.
-- Sufficiency of credit enhancement.
-- Portfolio Financial Servicing Company acts as warm backup servicer for the master trust. The backup servicer receives and reviews weekly data feeds from NextGear.
-- The legal structure and presence of legal opinions that will address the true sale of the assets to the Issuer, the non-consolidation of the special-purpose vehicle with NextGear, 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.

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

The applicable methodology is Rating U.S. Wholesale Securitizations (June 2015), 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 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.