DBRS Morningstar Confirms Ratings on Two Regional Management Issuance Trusts and on GIFS Capital Company LLC - Regional Management Corp. II (RLF)

DBRS, Inc. (DBRS Morningstar) confirmed its ratings on the following classes of securities issued by Regional Management Issuance Trust 2018-2 and 2019-1 and GIFS Capital Company LLC - Regional Management Corp. II (RLF):

-- Regional Management Issuance Trust 2018-2, Class A Asset-Backed Notes, confirmed at AA (sf)
-- Regional Management Issuance Trust 2018-2, Class B Asset-Backed Notes, confirmed at A (sf)
-- Regional Management Issuance Trust 2018-2, Class C Asset-Backed Notes, confirmed at BBB (sf)
-- Regional Management Issuance Trust 2018-2, Class D Asset-Backed Notes, confirmed at BB (sf)
-- Regional Management Issuance Trust 2019-1, Class A Notes, confirmed at AA (sf)
-- Regional Management Issuance Trust 2019-1, Class B Notes, confirmed at A (sf)
-- Regional Management Issuance Trust 2019-1, Class C Notes, confirmed at BBB (sf)
-- GIFS Capital Company, LLC, Liquidity Agreement - RLF Class A Loans, confirmed at AA (sf)
-- GIFS Capital Company, LLC, Liquidity Agreement - RLF Class B Loans, confirmed at A (high) (sf)

The rating actions are based on the following analytical considerations:
-- The transaction assumptions consider DBRS Morningstar’s set of macroeconomic scenarios for select economies related to the Coronavirus Disease (COVID-19), available in its commentary “Global Macroeconomic Scenarios: September Update,” published on September 10, 2020. DBRS Morningstar initially published macroeconomic scenarios on April 16, 2020, which have been regularly updated. The scenarios were last updated on September 10, 2020, and are reflected in DBRS Morningstar’s rating analysis.

-- The assumptions consider the moderate macroeconomic scenario outlined in the commentary, with the moderate scenario serving as the primary anchor for current ratings. The moderate scenario remains predicated on a more rapid return of confidence and a steady recovery heading into 2021. Observed performance during the 2008–09 financial crisis and the possible impact from stimulus were also considered in the assumptions.

-- The level of hard credit enhancement in the form of overcollateralization, subordination, and amounts held in reserve fund available in the transaction. Hard credit enhancement and estimated excess spread are sufficient to support the DBRS Morningstar current rating levels listed above.

-- The collateral performance to date and DBRS Morningstar's assessment of future performance, including upward revisions to the expected charge off assumptions consistent with the expected unemployment levels in the moderate scenario.

-- The transaction parties’ capabilities with regard to origination, underwriting, and servicing.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

Notes:
The principal methodologies are Rating and Monitoring Asset-Backed Commercial Paper: U.S. ABCP Conduits ( February 5, 2020) and DBRS Morningstar Master U.S. ABS Surveillance (May 27, 2020), which can be found on our website under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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