DBRS Morningstar Assigns Provisional Ratings to ARM Master Trust, LLC, Series 2022-T1

DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following classes of notes to be issued by ARM Master Trust, LLC (the Issuer):

-- $185,376,000 Fixed Rate Series 2022-T1 Agricultural Loan Backed Notes, Class A at A (sf)
-- $14,624,000 Fixed Rate Series 2022-T1 Agricultural Loan Backed Notes, Class B at BBB (sf)

The provisional ratings are based on DBRS Morningstar’s review of the following analytical considerations:

-- The transaction assumptions consider DBRS Morningstar’s baseline macroeconomic scenarios for rated sovereign economies, available in its commentary, “Baseline Macroeconomic Scenarios for Rated Sovereigns June 2022 Update,” published on June 29, 2022. These baseline macroeconomic scenarios replace DBRS Morningstar’s moderate and adverse Coronavirus Disease (COVID-19) pandemic scenarios, which were first published in April 2020.

-- Transaction capital structure, proposed ratings, and sufficiency of available credit enhancement.

-- Crop insurance coverage of the crops backing the collateral pool and concentration risks arising from concentration to a single approved insurance provider (AIP) or a crop type.

-- Insolvency risk of an AIP performing its obligations under the related federal crop insurance policy.

-- Payment terms of crops and payment obligations of the notes.

-- Credit quality and concentration of collateral as of the Statistical Disclosure Date and possible migration during revolving periods mitigated by concentration limits.

-- The underwriting and origination capabilities of Agrifund, LLC.

-- The ability of AG Resource Servicing, LLC, as the Servicer, to make and monitor collections on the collateral pool and other required activities.

-- The legal structure and expected presence of legal opinions that address the true sale of the assets to the Issuer, the nonconsolidation of the special-purpose vehicle with AG Resource Management, that the trust has a valid first-priority security interest in the assets, and consistency with DBRS Morningstar’s “Legal Criteria for U.S. Structured Finance.”

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
General Considerations

There were no Environmental/Social/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 U.S. ABS General Ratings Methodology (March 19, 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 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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