Morningstar DBRS Assigns Provisional Credit Ratings to MPOWER Education Trust 2024-A

DBRS, Inc. (Morningstar DBRS) assigned provisional credit ratings to the notes to be issued by MPOWER Education Trust 2024-A (MPOWER 2024-A) as follows:

-- $145,500,000 Class A Notes rated A (sf)
-- $40,300,000 Class B Notes rated BBB (sf)
-- $12,300,000 Class C Notes rated BB (sf)

CREDIT RATING RATIONALE/DESCRIPTION
The Morningstar DBRS provisional credit ratings on the notes are based upon a review by Morningstar DBRS of the following considerations:

-- The transaction's capital structure and the form and sufficiency of available credit enhancement. Overcollateralization, subordination, a reserve account and excess spread create credit enhancement levels that are commensurate with the proposed ratings.

-- Transaction cash flows are sufficient to repay investors under all rating stress scenarios in accordance with the terms of the MPOWER 2024-A transaction documents.

-- The quality and credit characteristics of the student loan borrowers.

-- Structural features of the transaction that increase overcollateralization targets and/or floors if performance deteriorates.

-- The experience, origination and underwriting capabilities of MPOWER and its bank partner. Morningstar DBRS has performed an operational assessment of MPOWER and considers MPOWER via its bank partnership with Bank of Lake Mills an acceptable originator of private student loans.

-- The ability of the subservicer to perform collections on the collateral pool and other required activities. Morningstar DBRS has performed an operational assessment of Launch Servicing, LLC and considers the entity an acceptable subservicer of private student loans.

-- The legal structure and expected legal opinions that will address the true sale of the student loans, the nonconsolidation of the trust, that the indenture trustee has a valid and perfected security interest in the assets and the consistency with the "Morningstar DBRS Legal Criteria for US Structured Finance."

-- The transaction assumptions consider Morningstar DBRS' baseline macroeconomic scenarios for rated sovereign economies, available in its commentary, "Baseline Macroeconomic Scenarios for Rated Sovereigns: March 2024 Update" published on March 27, 2024. These baseline macroeconomic scenarios replace Morningstar DBRS' moderate and adverse COVID-19 pandemic scenarios, which were first published in April 2020.

Morningstar DBRS' credit rating on the securities referenced herein addresses the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Noteholders' Interest Distribution Amount and the related Outstanding Principal Amount.

Morningstar DBRS' credit rating does not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, the associated contractual payment obligation that is not a financial obligation for each of the rated notes is the related interest on any unpaid Noteholders' Interest Distribution Amount.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS 
There were no Environmental/Social/Governance factors 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 (January 23, 2024) at https://dbrs.morningstar.com/research/427030.

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

The principal methodology applicable to the credit ratings is Rating U.S. Private Student Loan Securitizations (October 25, 2023), https://dbrs.morningstar.com/research/422385.

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

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.

A provisional credit rating is not a final credit rating with respect to the above-mentioned securities and may change or be different than the final credit rating assigned or may be discontinued. The assignment of final credit ratings on the above-mentioned securities is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit ratings.

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

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

-- Rating U.S. Structured Finance Transactions (April 15, 2024), https://dbrs.morningstar.com/research/431204

-- Operational Risk Assessment for U.S. ABS Servicers (March 21, 2024), https://dbrs.morningstar.com/research/430003

-- Operational Risk Assessment for U.S. ABS Originators (March 21, 2024), https://dbrs.morningstar.com/research/430004

-- Legal Criteria for U.S. Structured Finance (April 15, 2024), https://dbrs.morningstar.com/research/431205

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.