Morningstar DBRS Assigns Provisional Credit Ratings to Compass Datacenters Issuer II, LLC Series 2025-1 (Compass 2025-1)

DBRS, Inc. (Morningstar DBRS) assigned provisional credit ratings to the following classes of Term Notes, Series 2025-1 (the Term Notes) to be issued by Compass Datacenters Issuer II, LLC (the Master Trust):

-- Series 2025-1 Class A-1 (Class A-1) at (P) AAA (sf)
-- Series 2025-1 Class A-2 (Class A-2) at (P) AA (sf)
-- Series 2025-1 Class B-1 (Class B-1) at (P) A (sf)
-- Series 2025-1 Class B-2 (Class B-2) at (P) A (low) (sf)

All trends are Stable.

Compass 2025-1 is collateralized by the borrower's fee-simple interest in four hyperscale data center properties in Red Oak, Texas, in the Dallas metro. Compass Datacenters, LLC (Compass) owns and operates the subject data centers, which represent the first four data centers of a larger 10-building master-planned campus. The subject data centers were completed between 2024 and 2025 and are 100% occupied by a tenant rated AAA, which has fully leased the entire campus. Morningstar DBRS generally takes a positive view on the credit profile of the overall transaction based on its strong credit tenancy profile, strong data center operator, favorable market composition, affordable power rates, and desirable efficiency metrics. The transaction is structured as a master trust. The subject Term Notes represent the third issuance of notes from the master trust. As part of the inaugural Series 2024-1 issuance, the first two data centers in the Red Oak campus, DFW-III-A and DFW-III-B, were contributed to the master trust. As part of the second Series 2024-2 issuance, the third data center in the campus, DFW-III-C, was contributed to the master trust. In the third Series 2025-1 issuance, the fourth data center in the campus, DFW-III-D, will be contributed to the master trust. Morningstar DBRS considered the debt and collateral associated with the first and second issuance from the master trust during the analysis of the third and subject issuance.

Data centers have existed in one form or another for many years, and have become a key component in the modern global technology industry. The advent of cloud computing, streaming media, file storage, and artificial intelligence applications has increased the need for these facilities over the last 10 years to manage, store, and transmit data globally. Both hyperscale and colocation data centers have a role in the existing data ecosystem. Hyperscale data centers are designed for large capacity storage and information processing, whereas colocation centers act as an on-ramp for users to gain access to the wider network or for information from the network to be routed back to users. While previous incarnations of data centers were often constructed in existing buildings and converted, the needs of the market have begun to require purpose-built facilities that are engineered for this single use. From the standpoint of the physical plants, data center assets are heavily powered with 144 megawatts of critical IT load and feature N+1 redundancy for all building systems. Morningstar DBRS views the four data centers as strong assets with a strong critical infrastructure, including power and redundancy that is built to accommodate the technology needs of today and the future.

Morningstar DBRS' credit ratings on the Term Notes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related principal amounts and interest distribution amounts for Class A-1, Class A-2, Class B-1, and Class B-2.

Morningstar DBRS' credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, post-ARD additional interest and prepayment consideration for Class A-1, Class A-2, Class B-1, and Class B-2.

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

All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.

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

The principal methodology is Rating and Monitoring Data Center Transactions (April 23, 2025)
https://dbrs.morningstar.com/research/452372.

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

With regard to due diligence services, Morningstar DBRS was provided with the Form ABS Due Diligence-15E (Form-15E), which contains a description of the information that a third party reviewed in conducting the due diligence services and a summary of the findings and conclusions. While due diligence services outlined in Form-15E do not constitute part of Morningstar DBRS' methodology, Morningstar DBRS used the data file outlined in the independent accountant's report in its analysis to determine the credit ratings referenced herein.

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 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.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

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.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 332-3429

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

-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024)
https://dbrs.morningstar.com/research/439702
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024)
https://dbrs.morningstar.com/research/438283
-- Legal Criteria for U.S. Structured Finance (December 3, 2024)
https://dbrs.morningstar.com/research/444064

A description of how Morningstar DBRS analyzes structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/417279.

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