DBRS Morningstar Assigns Provisional Ratings to CommonBond Student Loan Trust 2020-A-GS

DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following classes of notes to be issued by CommonBond Student Loan Trust 2020-A-GS (CBSLT 2020-A-GS):

-- $195,455,000 Class A Notes at AAA (sf)
-- $15,796,000 Class B Notes at A (sf)

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

-- The transaction assumptions consider DBRS Morningstar’s set of macroeconomic scenarios for select economies related to the Coronavirus Disease (COVID-19), available in its commentary “Global Macroeconomic Scenarios: Implications for Credit Ratings,” published on April 16, 2020.
-- The analysis considers the moderate macroeconomic scenario outlined in the commentary (the moderate scenario serving as the primary anchor for current ratings). In the moderate scenario, DBRS Morningstar currently expects that the Coronavirus Disease (COVID-19) will begin to be contained during Q2 2020, resulting in a gradual relaxation of stay-at-home measures and nonessential business closures, allowing a gradual economic recovery to begin starting in Q3 2020.
-- DBRS Morningstar revised its base-case default and forbearance assumptions for this transaction.
-- 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.
-- The experience, underwriting, and origination capabilities of CommonBond.
-- The ability of the Servicer to perform collections on the collateral pool and other required activities.
-- The legal structure and expected presence of legal opinions that will address the true sale of the student loans, the nonconsolidation of the trust, that the trust has a valid first-priority security interest in the assets, and consistency with the DBRS Morningstar “Legal Criteria for U.S. Structured Finance.”

CBSLT 2020-A-GS will use a traditional pass-through structure, with credit enhancement consisting of overcollateralization, subordination provided by the Class B Notes for the benefit of the Class A Notes, a reserve account for the Class A Notes, a liquidity account for the Class B Notes, and excess spread.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

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

The principal methodology is Rating U.S. Private Student Loan Securitizations (November 20, 2019), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

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.dbrsmorningstar.com or contact us at [email protected].

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