Morningstar DBRS Assigns Provisional Credit Rating to Hageman Capital 2025 Issuer Trust

DBRS, Inc. (Morningstar DBRS) assigned a provisional credit rating to the following class of notes to be issued by Hageman Capital 2025 Issuer Trust (Hageman or the Company):

-- Class A: $101,408,000 at (P) AAA (sf)

CREDIT RATING RATIONALE/DESCRIPTION
The credit rating is based on Morningstar DBRS' review of the following analytical considerations:
-- Transaction capital structure, proposed credit ratings, and form and sufficiency of available credit enhancement.
-- Credit enhancement in the form of overcollateralization and excess spread.
-- Credit enhancement levels sufficient to support the Morningstar DBRS-expected delinquency and loss severity assumptions under various stress scenarios.
-- Tax Lien Asset Bonds (TLABs) are municipal revenue bonds subject to tax liens, a minimum tax payment, and that represent a priority claim on real estate that is senior in priority to the mortgage lender and the developer's equity.
-- The current collateral pool consists of 16 TLABs totaling approximately $106.74 million.
-- Of the major rehab and new construction projects reported in the construction tracker, approximately 32.7% of the outstanding assessment balance is in progress.
-- For the cash flow analysis, Morningstar DBRS applied a loss severity assumption of 35%. The assumption was determined in consideration of (1) concentrations, (2) share of ground-up construction, (3) calibration against other outstanding similar profile transactions, and (4) other qualitative factors with respect to the collateral pool and transaction structure.
-- The value of the underlying commercial properties relative to the outstanding balance of the TLAB with a weighted-average loan-to-value ratio of 13.73% on an as-stabilized basis.
-- Review of specific properties (e.g., properties securing larger TLAB and/or non-standard property types) and review of the construction status of existing properties.
-- The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms of the transaction documents. For this transaction, the credit rating addresses the timely payment of interest and the ultimate payment of principal by the Legal Final Maturity.
-- Morningstar DBRS performed an operational review of Hageman and considers the Company to be an acceptable originator of TLABs.
-- The legal structure and presence of legal opinions that address that the Issuer has a valid first-priority security interest and consistency with Morningstar DBRS' "Legal Criteria for U.S. Structured Finance" methodology.
-- Review of legal considerations specific to TLABs.
-- The transaction assumptions consider Morningstar DBRS' baseline macroeconomic scenarios for rated sovereign economies, available in its commentary, "Baseline Macroeconomic Scenarios for Rated Sovereigns March 2025 Update," published on March 26, 2025. These baseline macroeconomic scenarios replace Morningstar DBRS' moderate and adverse coronavirus pandemic scenarios, which were first published in April 2020.

Morningstar DBRS' credit rating on the Class A Notes addresses the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Monthly Interest 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. None of which have been identified.

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 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 (May 16, 2025) https://dbrs.morningstar.com/research/454196.

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

The principal methodology applicable to the credit rating is Rating U.S. Property Assessed Clean Energy (PACE) Securitizations (May 28, 2025) https://dbrs.morningstar.com/research/455194.

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.

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 a final credit rating 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 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.

-- Operational Risk Assessment for U.S. ABS Originators and Operational Risk Assessment for U.S. ABS Servicers (March 26, 2025)
https://dbrs.morningstar.com/research/450709

-- Legal Criteria for U.S. Structured Finance (December 3, 2024)
https://dbrs.morningstar.com/research/444064

-- Rating U.S. Structured Finance Transactions (March 10, 2025)
https://dbrs.morningstar.com/research/449616

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