Morningstar DBRS Finalizes Provisional Credit Ratings on Ascent Education Funding Trust 2024-A

DBRS, Inc. (Morningstar DBRS) finalized its provisional credit ratings on the classes of notes (the Notes) issued by Ascent Education Funding Trust 2024-A (Ascent 2024-A) as follows:

-- $239,330,000 Fixed Rate Class A Notes at AA (sf)
-- $17,230,000 Fixed Rate Class B Notes at A (sf)
-- $30,870,000 Fixed Rate Class C Notes at BBB (low) (sf)

CREDIT RATING RATIONALE/DESCRIPTION
The credit ratings are based on Morningstar DBRS' review of the following analytical considerations:

(1) The transaction's capital structure and the form and sufficiency of available credit enhancement.
-- Overcollateralization (OC), subordination, the Reserve Account, and excess spread create credit enhancement levels that are commensurate with the proposed credit ratings.
-- OC for each class of Notes will build to its respective target amount (Specified Overcollateralization Amount). Funds may not be released from the trust until the respective OC targets are reached.
-- Transaction cash flows are sufficient to repay investors under all credit rating stress scenarios in accordance with the terms of the Ascent 2024-A transaction documents.

(2) The quality and credit characteristics of the student loan borrowers.

(3) Structural features of the transaction that require the Notes to enter into full turbo principal amortization if credit enhancement deteriorates.

(4) The experience, origination, and underwriting capabilities of Ascent Funding, LLC (Ascent) and its bank partners.
-- Morningstar DBRS has performed a satisfactory assessment of Ascent and its bank partners, Richland State Bank and Bank of Lake Mills.

(5) The ability of the Servicer and the Master Servicer 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 to be an acceptable servicer.

(6) The legal structure and presence of legal opinions that address the true sale of the student loans, the nonconsolidation of the trust, that the trust has a valid first-priority security interest in the assets, and the consistency with the Morningstar DBRS "Legal Criteria for U.S. Structured Finance."

(7) 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 coronavirus pandemic scenarios, which were first published in April 2020.

Morningstar DBRS' credit ratings on the securities referenced herein address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations for each of the rated notes are the related Noteholders' Interest Distribution Amount, including unpaid interest from the prior distribution date, and the related Principal Amount.

Morningstar DBRS' credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction documents that are not financial obligations. The associated contractual payment obligation that is not a financial obligation for each of the rated notes is the interest on any unpaid interest from the prior distribution date.

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 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 (January 23, 2024), 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 ratings were initiated at the request of the rated entity.

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

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.

These are solicited credit ratings.

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

The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at info-DBRS@morningstar.com.

DBRS, Inc.
140 Broadway, 43rd Floor
New York, NY 10005 USA
Tel. +1 212 806-3277

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

Interest Rate Stresses for U.S. Structured Finance Transactions (February 26, 2024), https://dbrs.morningstar.com/research/428623

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.