DBRS Morningstar Assigns Provisional Ratings to Iowa Student Loan Liquidity Corporation Series 2021-1

DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following series of notes to be issued by Iowa Student Loan Liquidity Corporation Series 2021-1 (ISL 2021-1):

-- Up to $170,000,000 Class A-1A Notes rated AAA (sf)*
-- Up to $340,000,000 Class A-1B Notes rated AAA (sf)*

*The Class A Notes will be issued in the aggregate principal amount of $340,000,000, allocated between the Class A-1A Notes and the Class A-1B Notes as determined on or before the date of pricing. The maximum principal amount of the Class A-1A Notes that will be issued is $170,000,000.

The provisional ratings are based on DBRS Morningstar’s review 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) pandemic, available in its commentary “Global Macroeconomic Scenarios: March 2021 Update,” published on March 17, 2021. DBRS Morningstar initially published macroeconomic scenarios on April 16, 2020, which have been regularly updated. The scenarios were last updated on March 17, 2021, 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 factors in increasing success in containment during the first half of 2021, enabling the continued relaxation of restrictions.
-- The transaction’s form and sufficiency of available credit enhancement.
-- The ability of the servicer to perform collections on the collateral pool and other required activities.
-- The provisions in the transaction documents anticipate the transition to a new replacement index in the event that LIBOR is discontinued.
-- The legal structure and expected legal opinions.

The collateral securing ISL 2021-1 will consist of student loans originated pursuant to the Federal Family Education Loan Program, which are ultimately guaranteed by the U.S. Department of Education for at least 97% of defaulted principal plus accrued interest. Aspire Resources Inc., a wholly owned subsidiary of ISL, will act as servicer for 100% of the student loans. Pennsylvania Higher Education Assistance Agency will act as backup servicer.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at: https://www.dbrsmorningstar.com/research/373262.

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

The principal methodology is Rating U.S. Federal Family Education Loan Program Securitizations (February 19, 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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