DBRS Morningstar Takes Rating Actions on Four Amur Equipment Finance Transactions

DBRS, Inc. (DBRS Morningstar) upgraded 10 ratings, discontinued one rating, and confirmed the remaining ratings on the following classes of securities included in four Amur Equipment Finance transactions:

Amur Equipment Finance Receivables VI LLC:
-- Series 2018-2, Class A-2 Notes, confirmed at AAA (sf)
-- Series 2018-2, Class B Notes, upgraded to AAA (sf) from AA (high) (sf)
-- Series 2018-2, Class C Notes, upgraded to AA (high) (sf) from A (high) (sf)
-- Series 2018-2, Class D Notes, upgraded to AA (low) (sf) from BBB (sf)
-- Series 2018-2, Class E Notes, upgraded to BBB (high) (sf) from BB (low) (sf)
-- Series 2018-2, Class F Notes, upgraded to B (high) (sf) from CCC (high) (sf)

Amur Equipment Finance Receivables VII LLC:
-- Series 2019-1, Class A-2 Notes, confirmed at AAA (sf)
-- Series 2019-1, Class B Notes, upgraded to AA (high) (sf) from AA (sf)
-- Series 2019-1, Class C Notes, upgraded to A (high) (sf) from A (low) (sf)
-- Series 2019-1, Class D Notes, upgraded to BBB (sf) from BBB (low) (sf)
-- Series 2019-1, Class E Notes, upgraded to BB (low) (sf) from B (high) (sf)
-- Series 2019-1, Class F Notes, upgraded to B (low) (sf) from CCC (high) (sf)

Amur Equipment Finance Receivables VIII LLC:
-- Series 2020-1, Class A-2 Notes, confirmed at AAA (sf)
-- Series 2020-1, Class B Notes, confirmed at AA (sf)
-- Series 2020-1, Class C Notes, confirmed at A (sf)
-- Series 2020-1, Class D Notes, confirmed at BBB (sf)
-- Series 2020-1, Class E Notes, confirmed at BB (sf)
-- Series 2020-1, Class F Notes, confirmed at B (sf)

Amur Equipment Finance Receivables IX LLC:
-- Series 2021-1, Class A-1 Notes, discontinued
-- Series 2021-1, Class A-2 Notes, confirmed at AAA (sf)
-- Series 2021-1, Class B Notes, confirmed at AA (sf)
-- Series 2021-1, Class C Notes, confirmed at A (sf)
-- Series 2021-1, Class D Notes, confirmed at BBB (sf)
-- Series 2021-1, Class E Notes, confirmed at BB (sf)
-- Series 2021-1, Class F Notes, confirmed at B (sf)

The rating actions are based on the following analytical considerations:
-- The transaction assumptions consider DBRS Morningstar’s baseline macroeconomic scenarios for rated sovereign economies, available in its commentary titled “Baseline Macroeconomic Scenarios For Rated Sovereigns,” published on September 8, 2021. These baseline macroeconomic scenarios replace DBRS Morningstar’s moderate and adverse Coronavirus Disease (COVID-19) pandemic scenarios, which were first published in April 2020. The baseline macroeconomic scenarios reflect the view that, although the pandemic remains a risk to the outlook, uncertainty around the macroeconomic effects of the pandemic has gradually receded. Current median forecasts considered in the baseline macroeconomic scenarios incorporate some risks associated with further outbreaks but remain fairly positive on recovery prospects given expectations of continued fiscal and monetary policy support. The policy response to the coronavirus may nonetheless bring other risks to the forefront in the coming months and years.

-- The removal of additional stress applied to account for the impact from the coronavirus pandemic as a result of the healthy condition of the equipment leasing sector and relatively stable overall economic conditions.

-- The improving collateral performance of the transactions, with performance metrics within the expectations range.

-- The accelerated pace of principal repayment (caused by low delinquencies and healthy collections), even in seasoned transactions, resulting in the faster build-up in credit enhancement, as the pool factor declines.

-- Improved recoveries on off-lease equipment inventory and the significant reduction in the amount of such inventory.

-- The relative benefit from obligor and geographic diversification of collateral pools.

-- The transaction parties’ capabilities with regard to originating, underwriting, and servicing.

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:
The principal methodology is DBRS Morningstar Master U.S. ABS Surveillance (May 26, 2021), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

The rated entity or its related entities did not 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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