Morningstar DBRS Confirms Credit Ratings on Merit Trust, Prime Trust, Reliant Trust and Zeus Receivables Trust

DBRS Limited (Morningstar DBRS) confirmed its credit ratings of R-1 (high) (sf) on the Senior Short-Term Asset-Backed Notes (Merit Trust Notes) issued by Merit Trust (Merit), Senior Short-Term Asset-Backed Notes (Prime Trust Notes) issued by Prime Trust (Prime), Senior Short-Term Asset-Backed Notes (Zeus Receivables Trust Notes) issued by Zeus Receivables Trust (Zeus), and Series A Notes (Reliant Trust Notes, and together with Merit Trust Notes, Prime Trust Notes, and Zeus Receivables Trust Notes, the Notes) issued by Reliant Trust (Reliant, and together with Merit, Prime, and Zeus, the Trusts). The credit rating confirmations are based on the addition of a new transaction to the Trusts (Transaction 100) on January 4, 2024.

CREDIT RATING RATIONALE/DESCRIPTION
As part of Morningstar DBRS’s ongoing efforts to increase the transparency of reporting on asset-backed commercial paper conduit activity, Morningstar DBRS also released a transaction summary report providing details of Transaction 100, which is secured by a loan supported by a portfolio of rental contracts for primarily residential and some commercial water heaters; water treatment equipment; home standby generators; and heating, ventilation, and air conditioning equipment.

Morningstar DBRS’s credit rating on the Notes addresses the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents.

Morningstar DBRS’s credit rating does not address non-payment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (July 4, 2023) https://dbrs.morningstar.com/research/416784.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology applicable to the credit rating is Rating Canadian Structured Finance Transactions (April 10, 2023) https://dbrs.morningstar.com/research/412430/rating-canadian-structured-finance-transactions.

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

The Morningstar DBRS Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. Morningstar DBRS analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://dbrs.morningstar.com/research/384482.

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 credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

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

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

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

Operational Risk Assessments for Canadian Structured Finance (April 4, 2023), https://dbrs.morningstar.com/research/412270/operational-risk-assessments-for-canadian-structured-finance

Legal Criteria for Canadian Structured Finance (June 20, 2023), https://dbrs.morningstar.com/research/416101/legal-criteria-for-canadian-structured-finance

Rating Canadian ABCP and Related Enhancement Features (March 3, 2023), https://dbrs.morningstar.com/research/410528/rating-canadian-abcp-and-related-enhancement-features

Derivatives Criteria for Canadian Structured Finance (June 16, 2023), https://dbrs.morningstar.com/research/415974

A description of how Morningstar DBRS analyses structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/410863.

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