DBRS Morningstar Takes Rating Actions on Two Pawnee Equipment Receivables Transactions

DBRS, Inc. (DBRS Morningstar) confirmed six ratings and upgraded four ratings on the following classes of securities included in two Pawnee Equipment Receivables transactions:

Pawnee Equipment Receivables (Series 2019-1) LLC:
-- Class A-2 Notes, confirmed at AAA (sf)
-- Class B Notes, upgraded to AA (high) (sf) from AA (sf)
-- Class C Notes, upgraded to A (high) (sf) from A (sf)
-- Class D Notes, upgraded to BBB (high) (sf) from BBB (sf)
-- Class E Notes, upgraded to BB (high) (sf) from BB (sf)

Pawnee Equipment Receivables (Series 2020-1) LLC:
-- Class A Notes, confirmed at AAA (sf)
-- Class B Notes, confirmed at AA (sf)
-- Class C Notes, confirmed at A (sf)
-- Class D Notes, confirmed at BBB (sf)
-- Class E Notes, confirmed at BB (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: March 2021 Update,” published on March 17, 2021. DBRS Morningstar initially published macroeconomic scenarios on April 16, 2020, which have been regularly updated. The scenarios were last updated on March 17, 2021, and are reflected in DBRS Morningstar’s rating analysis.

-- The assumptions consider the moderate and adverse macroeconomic scenarios outlined in the commentary, with the moderate scenario serving as the primary anchor for current ratings. The moderate scenario factors in increasing success in containment during the first half of 2021, enabling the continued relaxation of restrictions.

-- The currently available hard credit enhancement in the form of overcollateralization, subordination (as applicable), and amounts of deposit in the cash reserve account, as well as the change in the level of protection afforded by each form of credit enhancement since the closing of each transaction.

-- The collateral performance to date and DBRS Morningstar's assessment of future performance, including upward revisions to the expected cumulative net loss assumptions that take into account the increased stress commensurate with the moderate macroeconomic scenario.
-- The relative benefit from obligor and geographic diversification of collateral pools.

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

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
The principal methodology is DBRS Morningstar Master U.S. ABS Surveillance (May 27, 2020), which can be found on dbrsmorningstar.com 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 the 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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