DBRS Morningstar Assigns Provisional Ratings to ARM Master Trust, LLC, Series 2023-T1

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

-- $119,586,000 Fixed Rate Series 2023-T1 Agricultural Loan Backed Notes, Class A at A (sf)
-- $9,965,000 Fixed Rate Series 2023-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 - December 2022 Update, published on December 21, 2022. These baseline macroeconomic scenarios replace DBRS Morningstar’s moderate and adverse COVID-19 pandemic scenarios, which were first published in April 2020.

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

-- Ag Resource Management’s experience as an originator and servicer in the crop production lending business.

-- DBRS Morningstar’s expected charge-off rate projection for the collateral pool based on its analysis of the historical performance data.

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

-- Credit quality and concentration of collateral as of the Statistical Disclosure Date and possible migration of the collateral mix during the revolving period.

-- Payment terms of crop loans and payment obligations of the Notes.

-- 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 (May 17, 2022).

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

The principal methodology applicable to the rating is Rating U.S. Structured Finance Transactions (February 6, 2023): https://www.dbrsmorningstar.com/research/409449/rating-us-structured-finance-transactions.

Other methodologies referenced in this transaction are listed at the end of this press release.

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 rating was initiated at the request of the rated entity.
The rated entity or its related entities did participate in the rating process for this rating action.
DBRS Morningstar had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
This is a solicited credit rating.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

DBRS, Inc.
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New York, NY 10005 USA
Tel. +1 212 806-3277

The rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

Operational Risk Assessment for U.S. ABS Servicers (February 6, 2023) https://www.dbrsmorningstar.com/research/409447/operational-risk-assessment-for-us-abs-servicers

Operational Risk Assessment for U.S. ABS Originators (November 8, 2022) https://www.dbrsmorningstar.com/research/405082/operational-risk-assessment-for-us-abs-originators

Legal Criteria for U.S. Structured Finance (December 7, 2022) https://www.dbrsmorningstar.com/research/407008/legal-criteria-for-us-structured-finance

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