DBRS Morningstar Confirms Ratings on Six Classes of Avis Budget Rental Car Funding (AESOP) LLC

DBRS, Inc. (DBRS Morningstar) confirmed the ratings on six securities issued by two Avis Budget Rental Car Funding (AESOP) LLC transactions:

-- Series 2017-2, Class A Notes at AAA (sf)
-- Series 2017-2, Class B Notes at A (high) (sf)
-- Series 2017-2, Class C Notes at BBB (sf)
-- Series 2018-1, Class A Notes at AAA (sf)
-- Series 2018-1, Class B Notes at A (high) (sf)
-- Series 2018-1, Class C Notes at BBB (sf)

The rating actions are based on the following analytical considerations:

-- The transaction analysis considers DBRS Morningstar’s baseline macroeconomic scenarios for rated sovereign economies, available in its commentary “Baseline Macroeconomic Scenarios For Rated Sovereigns December 2021 Update,” published on December 9, 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 recent coronavirus developments, particularly the new omicron variant with subsequent restrictions, combined with rising inflation pressures in some regions, may dampen near-term growth expectations in coming months. However, DBRS Morningstar expects the baseline projections will continue to point to an ongoing, gradual recovery.

-- The rental car industry continues to bounce back from the trough of the pandemic. The resumption of leisure travel, coupled with Avis Budget Group, Inc.’s rationalization of its rental fleet, has resulted in improved fleet utilization.

-- Vehicle disposition remains strong as a result of the shortage of new cars. In addition, the demand for rental cars and the potential for increased daily rates provide for significant revenue growth compared with pre-pandemic results.

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 (January 27, 2022), 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.

This rating is endorsed by DBRS Ratings Limited for use in the United Kingdom, and by DBRS Ratings GmbH for use in the European Union, respectively. The following additional regulatory disclosures apply to endorsed ratings:

The last rating action on these transactions took place on March 5, 2021, when DBRS Morningstar confirmed the ratings on all classes for these transactions and removed the ratings from Under Review with Negative Implications.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage: https://www.fca.org.uk/firms/credit-rating-agencies.

Lead Analyst: Arti Mattu, Vice President, U.S. ABS – Global Structured Finance
Rating Committee Chair: Sergey Moiseenko, Managing Director, U.S. ABS – Global Structured Finance
Initial Rating Date: December 1, 2017 (Avis Budget Rental Car Funding (AESOP) LLC, Series 2017-2) and April 19, 2018 (Avis Budget Rental Car Funding (AESOP) LLC, Series 2018-1)

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

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DBRS Morningstar Master U.S. ABS Surveillance (January 27, 2022) https://www.dbrsmorningstar.com/research/391316