DBRS Morningstar Assigns Rating to Museum Finance LLC

DBRS, Inc. (DBRS Morningstar) assigned an A (sf) rating to Museum Finance LLC’s Class A Loans that have been issued pursuant to the Loan and Security Agreement among Museum Finance LLC as Borrower, Sheffield Receivables Company LLC as Lender, and Barclays Bank PLC (rated “A” with a Stable trend by DBRS Morningstar) as Facility Agent. The Class A Loans are secured by private student loans originated through College Avenue Student Loans, LLC (CASL) and its bank partner.

The rating is 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 - June 2021 Update,” published on June 18, 2021. DBRS Morningstar initially published macroeconomic scenarios on April 16, 2020, that have been regularly updated. The scenarios were last updated on June 18, 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 second half of 2021, enabling the continued relaxation of restrictions.
-- The transaction structure and sufficiency of the warehouse facility’s advance rate and other forms of credit enhancement, which are commensurate with a rating of A (sf).
-- Concentration limits and eligibility criteria, which will help maintain the characteristics of the revolving loan pool at a level commensurate with the rating level.
-- The warehouse facility has certain performance-related triggers, which, if violated, will result in an early amortization event.
-- The quality and credit characteristics of the student loan borrowers.
-- Structural features of the transaction that require the Class A Loans to enter into full turbo principal amortization if certain minimum parity levels are not maintained.
-- The experience, underwriting, and origination capabilities of CASL.
-- The ability of the Servicer, University Accounting Service, LLC, to perform collections on the collateral pool and other required activities.
-- The benefits offered by the existence of a Backup Servicer, the Pennsylvania Higher Education Assistance Agency (rated AAA (sf) by DBRS Morningstar).
-- The legal structure and 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.”

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. 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.

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

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