DBRS Morningstar Assigns Provisional Ratings to Lendmark Funding Trust 2019-2

DBRS, Inc. (DBRS Morningstar ) assigned provisional ratings to the following notes to be issued by Lendmark Funding Trust 2019-2 (Lendmark 2019-2 or the Issuer):

-- $278,900,000 Series 2019-2, Class A rated AA (sf)
-- $21,570,000 Series 2019-2, Class B rated A (sf)
-- $27,420,000 Series 2019-2, Class C rated BBB (low) (sf)
-- $22,660,000 Series 2019-2, Class D rated BB (sf)

The provisional ratings are based on a review by DBRS Morningstar of the following analytical considerations:
-- The transaction’s capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested. For this transaction, the ratings address the timely payment of interest on a monthly basis and principal by the legal final maturity date.
-- Lendmark Financial Services, LLC’s (Lendmark) capabilities with regard to originations, underwriting and servicing.
-- The credit quality of the collateral and performance of Lendmark’s consumer loan portfolio. DBRS Morningstar has used a hybrid approach in analyzing the Lendmark portfolio that incorporates elements of static pool analysis, employed for assets such as consumer loans, and revolving asset analysis, employed for assets such as credit card master trusts.
-- The legal structure and presence of legal opinions that address the true sale of the assets to the Issuer, the non-consolidation of the special-purpose vehicle with Lendmark and that the trust has a valid first-priority security interest in the assets and is consistent with DBRS Morningstar’s “Legal Criteria for U.S. Structured Finance.”

Lendmark 2019-2 represents the eight securitization of a portfolio of non-prime and subprime personal loans originated through Lendmark’s branch network.

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

The principal methodologies are Rating U.S. Structured Finance Transactions: Appendix I — U.S. Consumer Loan ABS Transactions and Rating U.S. Credit Card Asset-Backed Securities, which can be found on dbrs.com under Methodologies & Criteria.

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

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

The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at [email protected].

For more information on this credit or on this industry, visit www.dbrs.com or contact us at [email protected].

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