Morningstar DBRS Finalizes Provisional Credit Ratings on ACHV ABS Trust 2024-2PL

DBRS, Inc. (Morningstar DBRS) finalized its provisional credit ratings on the following classes of notes issued by ACHV ABS Trust 2024-2PL (ACHV 2024-2PL or the Issuer):

-- $126,581,000 Class A Notes at AAA (sf)
-- $62,364,000 Class B Notes at AA (low) (sf)
-- $34,578,000 Class C Notes at A (low) (sf)

CREDIT RATING RATIONALE/DESCRIPTION

The credit ratings are based on Morningstar DBRS's review of the following analytical considerations:

(1) The transaction assumptions consider Morningstar DBRS' baseline macroeconomic scenarios for rated sovereign economies, available in its commentary Baseline Macroeconomic Scenarios for Rated Sovereigns: June 2024 Update, published on June 28, 2024. These baseline macroeconomic scenarios replace Morningstar DBRS' moderate and adverse COVID-19 pandemic scenarios, which were first published in April 2020.

(2) The Morningstar DBRS CNL assumption is 13.36% based on the Cutoff Date pool composition.

(3) The transaction's form and sufficiency of available credit enhancement.
-- Subordination, overcollateralization, amounts held in the Reserve Fund, and available excess spread, create credit enhancement levels that are commensurate with the credit ratings.
-- Transaction cash flows are sufficient to repay investors under all AAA (sf), AA (low) (sf), and A (low) (sf) stress scenarios in accordance with the terms of the ACHV 2024-2PL transaction documents.

(4) The experience, sourcing, and servicing capabilities of Achieve Personal Loans (APL).

(5) The experience, underwriting, and origination capabilities of Cross River Bank (CRB) and Pathward National Association (Pathward) (together, the Partner Banks).

(6) The ability of Wilmington Trust National Association to perform duties as a Backup Servicer and the ability of Nelnet Servicing, LLC to perform duties as a Backup Servicer Subcontractor.

(7) The annual percentage rate (APR) charged on the loans and the status of the Partner Banks as the true lenders.
-- All loans included in ACHV 2024-2PL are originated by CRB, a New Jersey state-chartered FDIC-insured bank, or Pathward, a national bank.
-- Loans originated by CRB are all within the New Jersey state usury limit of 30.00%.
-- Loans originated by Pathward are within the South Dakota state usury limit of 36.00%.
-- The weighted-average (WA) APR of the loans in the pool as of the Statistical Cutoff Date is 23.40%.
--Loans may be in excess of individual state usury laws; however, the Partner Banks as the true lenders are able to export rates that pre-empt state usury rate caps.
--Loans originated to borrowers in Connecticut, Vermont, Colorado, and West Virginia are excluded from the pool.
--Loans originated by the Partner Banks are sold directly to third-party investors under loan purchase agreements.
--Under the Loan Sale Agreement, APL is obligated to repurchase any loan if there is a breach of a representation and warranty that materially and adversely affects the interests of the purchaser.

(8) The credit quality of the pool is stronger than prior ACHV transactions. The ACHV 2024-2PL collateral pool has a higher percentage in credit tier 1, higher WA FICO score, and higher percentage of verified income greater than $100,000.

(9) The legal structure and legal opinions that address the true sale of the unsecured loans, the nonconsolidation of the trust, that the trust has a valid perfected security interest in the assets, and consistency with the Morningstar DBRS Legal Criteria for U.S. Structured Finance.

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 Interest Distributable Amount and the related Note Balance.

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 related interest on unpaid Interest Distributable Amount for each of the rated notes.

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.

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 Factors in Credit Ratings (August 13, 2024); https://dbrs.morningstar.com/research/437781.

Notes:
All figures are in US Dollars unless otherwise noted.

The principal methodology applicable to the credit ratings is Rating U.S. Structured Finance Transactions (Appendix I: U.S. Consumer Loan ABS Transactions) (August 6, 2024) https://dbrs.morningstar.com/research/437571.

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.

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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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 (August 6, 2024),
https://dbrs.morningstar.com/research/437571/rating-us-structured-finance-transactions

Operational Risk Assessment for U.S. ABS Originators and Servicers (August 6, 2024),
https://dbrs.morningstar.com/research/437545/operational-risk-assessment-for-us-abs-originators-and-servicers

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

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