DBRS Morningstar Withdraws Rating on Series 4 Notes, Maintains UR-Negative on Series 1, 2, and 3 Notes, and Assigns Ratings to Series 4-A Notes and Series 4-B Notes Issued by Cubitt Global LLC

DBRS, Inc. (DBRS Morningstar) discontinued and withdrew ratings on the Series 4 Notes, maintained Under Review with Negative Implications on the Series 1 Notes, Series 2 Notes, and Series 3 Notes, and assigned ratings to the Series 4-A Notes and Series 4-B Notes issued by Cubitt Global LLC, as follows:

DBRS Morningstar discontinued and withdrew its ratings on one series of notes as follows:
-- Cubitt Global LLC, Series 4 Notes

DBRS Morningstar maintained Under Review with Negative Implications on three series of notes as follows:
-- Cubitt Global LLC, Series 1 Notes rated AA (sf), Under Review with Negative Implications
-- Cubitt Global LLC, Series 2 Notes rated AA (sf), Under Review with Negative Implications
-- Cubitt Global LLC, Series 3 Notes rated AA (sf), Under Review with Negative Implications

DBRS Morningstar assigned ratings to two series of notes as follows:
-- Cubitt Global LLC, Series 4-A Notes assigned at AA (sf), Under Review with Negative Implications
-- Cubitt Global LLC, Series 4-B Notes assigned at AA (sf), Under Review with Negative Implications

DBRS Morningstar considered the following factors in its analysis:

-- Ratings on the Series 4-A Notes and Series 4-B Notes have been placed Under Review with Negative Implications pending resolution of the request for comments on proposed updates to Appendix V: Obligations Backed by Insurance Policy (Financial Guarantee) in the “Rating U.S. Structured Finance Transactions” methodology, which may, upon the close of the Request for Comment period, supersede the version published on October 20, 2021. This appendix to the methodology presents the criteria for which obligations backed by insurance policy (financial guarantee) in North America are assigned and/or monitored.

-- In the proposed update to the methodology, DBRS Morningstar retains the ability to flow through, on a one-to-one basis, an entity’s DBRS Morningstar credit rating in the assignment and monitoring of a structured finance security and removes the use of an internal assessment. DBRS Morningstar deems the update to be material. The rationale for the material change is to align DBRS Morningstar’s practice to flow through ratings across jurisdictions. Outstanding DBRS Morningstar insured obligation credit ratings are likely to be affected if (1) DBRS Morningstar’s credit ratings on the underlying entities differ from the existing internal assessment or (2) DBRS Morningstar does not maintain a credit rating on an underlying entity.

-- The Under Review status is expected to be resolved upon the resolution of the request for comment period.

-- The transaction assumptions consider DBRS Morningstar’s baseline macroeconomic scenarios for rated sovereign economies, available in its commentary, Baseline Macroeconomic Scenarios For Rated Sovereigns: March 2022 Update published on March 24, 2022. These baseline macroeconomic scenarios replace DBRS Morningstar’s moderate and adverse coronavirus pandemic scenarios, which were first published in April 2020. Despite several new or increasing risks including the Russian invasion of Ukraine, rising inflation, and new coronavirus variants, the overall outlook for growth and employment in the United States remains relatively positive.

-- The satisfactory insurance policy coverage of the principal of the Notes.

-- The creditworthiness of the insurance provider, Federal Insurance Company, which is deemed to be commensurate with the rating.

-- The full and timely payment of the Notes from the insurance proceeds upon worst-case default scenarios of the underlying receivables.

-- Structural protections that enforce a controlled wind-down upon certain occurrences.

-- DBRS Morningstar’s operational review with regard to originations, underwriting, and servicing, which concluded that the entity is an acceptable originator and servicer of trade receivables and includes an acceptable backup servicer.

-- The legal structure and its consistency with DBRS Morningstar’s “Legal Criteria for U.S. Structured Finance.”

-- DBRS Morningstar is rating to the Legal Final Maturity Date. The rating is based on the timely payment of interest and ultimate payment of principal.

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 Rating U.S. Structured Finance Transactions – Appendix V: Obligations Backed by Insurance Policy (Financial Guarantee) (October 20, 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/baseline-macroeconomic-scenarios-application-to-credit-ratings.

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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