DBRS Morningstar Assigns New Ratings to SoFi Alternative Trust 2020-A

DBRS, Inc. (DBRS Morningstar) assigned new ratings to the following classes of notes (collectively, the Notes) issued by SoFi Alternative Trust 2020-A (SAT 2020-A):

-- $891,600,000 Class A Notes at AAA (sf)
-- $54,100,000 Class B Notes at AA (sf)

The 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: September Update, published on September 10, 2020. DBRS Morningstar initially published macroeconomic scenarios on April 16, 2020, and has regularly updated them. The scenarios were last updated on September 10, 2020, and are reflected in DBRS Morningstar’s rating analysis.
-- The assumptions consider the moderate macroeconomic scenario outlined in the commentary, with the moderate scenario serving as the primary anchor for current ratings. The moderate scenario remains predicated on a more rapid return of confidence and a steady recovery heading into 2021.
-- The transaction’s form and sufficiency of available credit enhancement.
-- The sequential-pay structure.
-- 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 tripped or if credit enhancement deteriorates.
-- The experience, underwriting, and origination capabilities of SoFi Lending Corp. (SoFi).
-- The ability of the Servicer to perform collections on the collateral pool and other required activities.
-- The legal structure and presence of legal opinions that 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 the consistency with the DBRS Morningstar “Legal Criteria for U.S. Structured Finance.”

The Notes are backed by a trust certificate representing 100% of the beneficial ownership interest in a grantor trust, the assets of which consist of loans originated through SoFi’s private student loan refinancing program (Refinancing Loans). The Class A Notes and Class B Notes are secured by a group of fixed-rate refinancing loans.

Credit enhancement for SAT 2020-A consists 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.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/366542

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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