DBRS Morningstar Rates SCF Funding LLC’s $225 million Senior Notes Due June 30, 2025; June 30, 2027; June 30, 2029; and June 30, 2032, at BBB (low); Stable Trend

DBRS, Inc. (DBRS Morningstar) assigned a rating of BBB (low) to SCF Funding LLC’s $21 million 6.43% Series D Senior Notes due June 30, 2025; $89 million 6.60% Series E Senior Notes due June 30, 2027; $105 million 6.69% Series F Senior Notes due June 30, 2029; and $10 million 6.74% Series G Senior Notes due June 30, 2032 (collectively, the Notes). The trend on the Notes is Stable. The ratings benefit from a guarantee from Stonebriar Finance Holdings LLC (Stonebriar), and as a result are equalized to the Long-Term Issuer Rating of Stonebriar. Net proceeds from the issuance will be used to repay certain existing indebtedness and for general corporate purposes.

RATING DRIVERS
Consistent expansion in earnings with appropriate returns, while maintaining sound credit and asset performance and balance sheet leverage below 5.0x, would result in an upgrade in the ratings. A significant deterioration in the Company's credit or asset performance, weakening earnings generation, or a reduced cushion relative to its leverage covenant, would lead to a downgrade.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental, Social or Governance factors that had a significant or relevant effect on the credit analysis.

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/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings.

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

The principal methodology is the Global Methodology for Rating Non-Bank Financial Institutions (September 2, 2021): https://www.dbrsmorningstar.com/research/383936/global-methodology-for-rating-non-bank-financial-institutions. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (May 17, 2022): https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings, and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (April 4, 2022): https://www.dbrsmorningstar.com/research/394683/dbrs-morningstar-criteria-guarantees-and-other-forms-of-support.

The primary sources of information used for this rating include Company Documents. DBRS Morningstar considers the information available to it for the purposes of providing this rating was of satisfactory quality.

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.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar’s outlooks and ratings are under regular surveillance.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com.

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