DBRS Morningstar Notes Daimler Canada Finance Inc.’s Name Change to Mercedes-Benz Finance Canada Inc. and Daimler Finance North America LLC’s Name Change to Mercedes-Benz Finance North America LLC

DBRS Limited (DBRS Morningstar) notes that, effective July 1, 2022, Daimler Canada Finance Inc. and Daimler Finance North America LLC (both rated A (low) with a Stable trend by DBRS Morningstar) changed their names to Mercedes-Benz Finance Canada Inc. and Mercedes-Benz Finance North America LLC, respectively.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
DBRS Morningstar considered that the environmental factor, specifically costs relating to carbon and greenhouse gas emissions, represent a relevant factor as Mercedes-Benz Group AG (Mercedes-Benz) is taking deliberate measures (including substantial associated investments) to make its new vehicle fleet CO2-neutral across all stages of the value chain by 2039. Accordingly, Mercedes-Benz is planning the complete electrification of its product range; by the end of this decade, Mercedes-Benz wants to be all electric, wherever regional market conditions allow.

While the environmental factor could have some negative credit impact, DBRS Morningstar does not deem it sufficient to change the ratings or the trends assigned to Mercedes-Benz (and its rated subsidiaries). There were no 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.

Notes:
The principal methodologies are Rating Companies in the Automotive Manufacturing and Supplier Industries (October 14, 2021; https://www.dbrsmorningstar.com/research/385892), DBRS Morningstar Criteria: Guarantees and Other Forms of Support (April 4, 2022; https://www.dbrsmorningstar.com/research/394683), and DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (March 1, 2022; https://www.dbrsmorningstar.com/research/393065), which can be found on dbrsmorningstar.com under Methodologies & Criteria. 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).

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at [email protected].

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.

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:

Each of the principal methodologies employed in the analysis addressed one or more particular risks or aspects of the rating and were factored into the rating decision. Specifically, Rating Companies in the Automotive Manufacturing and Supplier Industries (October 14, 2021) was the primary rating methodology applied in determining the rating of parent company, Mercedes-Benz. Subsequently, DBRS Morningstar Criteria: Guarantees and Other Forms of Support (April 4, 2022) was applied in determining the ratings of Mercedes-Benz Finance Canada Inc. and Mercedes-Benz Finance North America LLC, both of which benefit from a Guarantee of Mercedes-Benz. The Guarantee, in combination with DBRS Morningstar’s assessment of additional implicit support considerations, including (but not limited to) business, reputational, and financial factors (that are deemed likely to motivate a parent or affiliated company to support its subsidiary issuer), results in a flow through of Mercedes-Benz’s rating to Mercedes-Benz Finance Canada Inc. and Mercedes-Benz Finance Canada Inc. Finally, DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (March 1, 2022) was applied to ensure that the liquidity provided in support of Mercedes-Benz Finance Canada Inc.’s and Mercedes-Benz Finance North America LLC ’s Commercial Paper ratings was consistent with DBRS Morningstar Criteria.

The last rating action took place on November 18, 2021, when DBRS Morningstar upgraded the long-term ratings of Mercedes-Benz to A (low) with a Stable trend.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

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: Robert Streda, Senior Vice President, Diversified Industries
Rating Committee Chair: Charles Halam-Andres, Managing Director, Diversified Industries & Sports Finance
Initial Rating Dates: Mercedes-Benz Group AG – August 29, 2000
Mercedes-Benz Finance Canada Inc. – May 19, 1995
Mercedes-Benz Finance North America LLC – November 14, 2016

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

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-- Rating Companies in the Automotive Manufacturing and Supplier Industries (October 14, 2021)
https://www.dbrsmorningstar.com/research/385892
-- DBRS Morningstar Criteria: Guarantees and Other Forms of Support (April 4, 2022)
https://www.dbrsmorningstar.com/research/394683
-- DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (March 1, 2022)
https://www.dbrsmorningstar.com/research/393065