DBRS Morningstar Finalizes U.S. Small Business Administration 7(a) Loan Program Confirmation of Originator Fee Certificate (COOF) Securitizations Methodology Appendices

DBRS Morningstar finalized its Appendix IX: U.S. Small Business Administration (SBA) 7(a) Loan Program Confirmation of Originator Fee Certificate (COOF) Securitizations (SBA 7(a) COOF) of the “Rating U.S. Structured Finance Transactions” methodology. DBRS Morningstar also finalized its new exhibits in the “Operational Risk Assessment for U.S. ABS Originators” and “Operational Risk Assessment for U.S. ABS Servicers” methodologies for the SBA 7(a) COOF asset class and a new Appendix XXIV: U.S. Small Business Administration (SBA) 7(a) Loan Program Confirmation of Originator Fee Certificate (COOF) Securitizations of the “DBRS Morningstar Master U.S. ABS Surveillance” methodology.

Publication of these methodologies follows the conclusion of the request for comment period that began on October 14, 2022. DBRS Morningstar received no comments during the request for comment period related to the SBA 7(a) COOF appendices. This “Rating U.S. Structured Finance Transactions” - Appendix IX: U.S. Small Business Administration (SBA) 7(a) Loan Program Confirmation of Originator Fee Certificate (COOF) Securitizations appendix supersedes the “U.S. ABS General Ratings Methodology” (December 2018) and is effective as of November 8, 2022.

The “Operational Risk Assessment for U.S. ABS Originators” and the “Operational Risk Assessment for U.S. ABS Servicers” methodologies were each updated to include a new SBA 7(a) COOF Exhibit and supersede the “U.S. ABS General Ratings Methodology” (December 2018). The effective date of the two methodologies is November 8, 2022.

The Appendix XXIV: U.S. Small Business Administration (SBA) 7(a) Loan Program Confirmation of Originator Fee Certificate (COOF) Securitizations, in the existing “DBRS Morningstar Master U.S. ABS Surveillance” methodology, supersedes the “U.S. ABS General Ratings Methodology” (December 2018) and is effective as of November 8, 2022.

As of November 8, 2022, the above-named methodologies will be used in connection with the assigning of new DBRS Morningstar credit ratings, and the monitoring of outstanding DBRS Morningstar credit ratings, in the U.S. Small Business Administration (SBA) 7(a) Loan Program Confirmation of Originator Fee Certificate (COOF) asset class.

All comments received during the request for comment period have been published to the DBRS Morningstar website, except in cases where confidentiality is requested by the respondent.

Notes:
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/402907.

DBRS Morningstar methodologies are publicly available on its website www.dbrsmorningstar.com under Methodologies & Criteria.

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