DBRS Morningstar Assigns Provisional Ratings to Navient Private Education Loan Trust 2020-I

DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following classes of notes to be issued by Navient Private Education Loan Trust 2020-I (Navient 2020-I):

-- $300,000,000 Fixed Rate Class A-1A Notes rated AAA (sf)*
-- $252,000,000 Floating Rate Class A-1B Notes rated AAA (sf)*
-- $52,000,000 Fixed Rate Class B Notes rated AA (sf)

*The allocation of the aggregate initial principal balance of the Class A-1A Notes and Class A-1B Notes (collectively, the Class A Notes) will be determined on or before the date of pricing. The aggregate initial principal balance of the class A-1 Notes will be equal to $552,000,000, of which the initial principal balance of the class A-1A Notes will be an amount between $100,000,000 and $300,000,000. The initial principal balance of the Class A-1B Notes will be an amount of at least $252,000,000, up to $452,000,000.

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: September Update,” published on September 10, 2020. DBRS Morningstar initially published macroeconomic scenarios on April 16, 2020, which have been regularly updated. 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.
-- Transaction 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 in accordance with the terms of the Navient 2020-I transaction documents.
-- The sequential-pay structure.
-- Structural features of the transaction that require the Class A Notes to enter into full turbo principal amortization under certain circumstances.
-- The quality and credit characteristics of the student loans and underlying borrowers.
-- The ability of Navient Solutions, LLC, as 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 and that the trust has a valid first-priority security interest in the assets, and the consistency with DBRS Morningstar’s “Legal Criteria for U.S. Structured Finance.”

The trust will consist of seasoned private student loans that were made and underwritten under various loan programs administered by the former Sallie Mae, Inc.

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 5, 2020), 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/359905.

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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