Morningstar DBRS Assigns Provisional Credit Ratings to Mariner Finance Issuance Trust 2024-B

DBRS, Inc. (Morningstar DBRS) assigned provisional credit ratings to the following classes of notes (collectively, the Notes) to be issued by Mariner Finance Issuance Trust 2024-B (MFIT 2024-B):

--$199,560,000 Class A Notes at (P) AAA (sf)
--$31,180,000 Class B Notes at (P) AA (low) (sf)
--$21,330,000 Class C Notes at (P) A (sf)
--$18,710,000 Class D Notes at (P) BBB (sf)
--$29,220,000 Class E Notes at (P) BB (sf)

CREDIT RATING RATIONALE/DESCRIPTION
The credit ratings are based on Morningstar DBRS' 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: September 2024 Update, published on September 25, 2024. These baseline macroeconomic scenarios replace Morningstar DBRS' moderate and adverse COVID-19 pandemic scenarios, which were first published in April 2020.
(2) Transaction capital structure and form and sufficiency of available credit enhancement.
--Credit enhancement is in the form of OC, subordination, amounts held in the reserve fund, and excess spread. Credit enhancement levels are sufficient to support Morningstar DBRS' stressed assumptions under all stress scenarios.
(3) The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested. For this transaction, the credit ratings address the timely payment of interest on a monthly basis and principal by the legal final maturity date.
(4) Mariner's capabilities with regard to originations, underwriting, and servicing.
--Morningstar DBRS performed an operational review of Mariner and, as a result, considers the entity to be an acceptable originator and servicer of personal loans.
--Mariner's senior management team has considerable experience and a successful track record within the consumer loan industry.
(5) The credit quality of the collateral and performance of Mariner's consumer loan portfolio. Morningstar DBRS used a hybrid approach in analyzing Mariner's portfolio that incorporates elements of static pool analysis, employed for assets such as consumer loans, and revolving loan analysis to account for renewal loans. As of the Statistical Cut-Off Date:
--The weighted-average (WA) remaining term of the collateral pool is approximately 38 months.
--The WA coupon (WAC) of the pool is 26.35% and the transaction includes a reinvestment criteria event that the WAC is less than 24.50%. All loans going into the pool will have an APR less than 36.00%.
--CPR rates for Mariners' portfolio, as estimated by Morningstar DBRS, have generally averaged between 8.0% and 14.0% since 2014 depending on product type.
--The Morningstar DBRS base-case assumption for CPR is 6.0%.
--Charge-off rates on the Mariner portfolio have generally ranged between 9.00% and 15.00% over the past several years.
--The Morningstar DBRS base-case assumption for the charge-off rate is 12.90% which is based on the MFIT 2024-B reinvestment criteria and recent credit performance.
--For this transaction, Morningstar DBRS assumed an overall recovery rate of 5.75% which based on historical recovery performance which varies by product type, with assumptions ranging from 5.00% to 7.50%.
(6) Mariner is currently subject to a complaint filed against it by eleven attorneys generals. The complaint initially filed by the Eastern District of Pennsylvania by the attorneys general for Pennsylvania, the District of Columbia, New Jersey, Oregon, Utah, and Washington alleges certain unfair and deceptive acts and practices by Mariner. Specifically, in relation to its sale of optional loan products, refinancing practices and LBM products. On October 17, 2022, the state of Utah voluntarily withdrew from the matter. On March 22, 2024 six additional states joined the lawsuit and did not add any additional claims to the litigation. The attorneys generals seek to enjoin Mariner's conduct, and seek penalties, restitution to borrowers and rescission and/or reformation of borrower agreements. On January 12, 2024, the court denied Mariner's motion to dismiss. On January 26, 2024, Mariner filed its answer to the complaint, denying any and all allegations of unlawful or deceptive business practices, or that it engaged in any of the wrongdoing alleged in the complaint. The ongoing litigation remains in the discovery phase. To the extent it is determined that the Loans were not originated in accordance with all applicable laws, the relevant Sellers may be obligated to repurchase from the Issuer.
(7) The legal structure and presence of legal opinions that will address the true sale of the assets from the Seller to the Depositor, the non-consolidation of the special-purpose vehicle with the Seller, that the Indenture Trustee has a valid first-priority security interest in the assets, and the expected consistency with the Morningstar DBRS Legal Criteria for U.S. Structured Finance.

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 Monthly Interest Amount and the related Note Balance.

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 related interest on any unpaid Monthly Interest 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 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 (13 August 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) (06 August 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.

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 the final credit ratings on the above-mentioned securities are 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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New York, NY 10005 USA
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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. Credit Card Asset-Backed Securities (August 6, 2024), https://dbrs.morningstar.com/research/437551
-- Operational Risk Assessment for U.S. ABS Originators and Servicers (August 6, 2024), https://dbrs.morningstar.com/research/437545
-- 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.