Morningstar DBRS Confirms Credit Ratings on Series 2023-1 and 2024-1 Notes Issued by WTH Car Rental ULC

DBRS Limited (Morningstar DBRS) confirmed its AAA (sf) credit ratings on the Fixed Rate Asset-Backed Senior Notes, Series 2023-1 Class A and Fixed Rate Asset-Backed Senior Notes, Series 2024-1, Class A (collectively, the Notes) issued by WTH Car Rental ULC as part of Morningstar DBRS' continued effort to provide market participants with annual updates.

The credit rating confirmations are based on the following factors as of November 2024:
(1) High and dynamic credit enhancement levels in the form of overcollateralization and a letter of credit and/or cash. The Notes are protected by dynamic credit enhancement that was sized on the assumption that the fleet would have to be liquidated at any point throughout the year prior to the Expected Final Payment Date of the Notes. Required enhancement levels for Program Vehicles are determined by the credit rating of the manufacturer of the underlying vehicles. For Nonprogram Vehicles, the required enhancement level is subject to increase based on vehicle disposition/mark-to-market results.
(2) Experienced administrator. WTH Funding Limited Partnership has a long, successful track record of managing the acquisition and disposition of WTH Car Rental ULC's Vehicle Fleet through challenging economic cycles. The transaction is also supported by structural protections. Conservative depreciation rates have historically been applied to Nonprogram Vehicles, resulting in gains on dispositions.
(3) The transaction continues to perform well and is within Morningstar DBRS' expected parameters, as defined at the onset of the transaction.

The Notes are repaid through the collection of proceeds arising from the payments received from the lease of the Vehicle Fleet pursuant to the Master Lease Agreement, the repurchase of Program Vehicles by the Program Vehicle Manufacturers, and the sale of Nonprogram Vehicles.

Morningstar DBRS monitors the performance of the transaction to identify any deviation from its expectation of the Notes at issuance and to ensure that the credit ratings remain appropriate. The review is predicated on the timely receipt of performance information from the related providers.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

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 Canadian dollars unless otherwise noted.

The principal methodology applicable to the credit ratings is Master Canadian Structured Finance Surveillance Methodology (August 06, 2024) https://dbrs.morningstar.com/research/437538.

Other methodologies referenced in this transaction are listed at the end of this press release. 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 info-DBRS@morningstar.com.

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.

Legal and Derivatives Criteria for Canadian Structured Finance (August 12, 2024)
https://dbrs.morningstar.com/research/437761

Operational Risk Assessments for Canadian Structured Finance (August 06, 2024)
https://dbrs.morningstar.com/research/437547

Rating Canadian Rental Car Fleet Securitizations (September 25, 2024)
https://dbrs.morningstar.com/research/439990

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 info-DBRS@morningstar.com.