DBRS Morningstar Finalizes Provisional Ratings on North Texas Higher Education Authority, Inc. Series 2021-1

DBRS, Inc. (DBRS Morningstar) finalized its provisional ratings on the following series of notes issued by North Texas Higher Education Authority, Inc. Series 2021-1 (NTHEA 2021-1):

-- $65,000,000 Class A-1A Notes rated AAA (sf)
-- $403,000,000 Class A-1B Notes rated AAA (sf)
-- $10,000,000 Class B Notes rated A (sf)

The ratings are based on DBRS Morningstar’s review of the following analytical considerations:

-- The transaction assumptions consider DBRS Morningstar’s baseline macroeconomic scenarios for rated sovereign economies, available in its commentary “Baseline Macroeconomic Scenarios For Rated Sovereigns,” published on September 8, 2021. These baseline macroeconomic scenarios replace DBRS Morningstar’s moderate and adverse Coronavirus Disease (COVID-19) pandemic scenarios, which were first published in April 2020. The baseline macroeconomic scenarios reflect DBRS Morningstar’s view that, although COVID-19 remains a risk to the outlook, uncertainty around the macroeconomic effects of the pandemic has gradually receded. Current median forecasts considered in the baseline macroeconomic scenarios incorporate some risks associated with further outbreaks, but remain fairly positive on recovery prospects given expectations of continued fiscal and monetary policy support. The policy response to COVID-19 may nonetheless bring other risks to the forefront in the coming months and years.
-- The transaction’s form and sufficiency of available credit enhancement.
-- The ability of the subservicers to perform collections on the collateral pool and other required activities.
-- The provisions in the transaction documents anticipate the transition to a new replacement index upon the discontinuation of LIBOR.
-- The legal structure and legal opinions.

The collateral securing NTHEA 2021-1 consists of student loans originated pursuant to the Federal Family Education Loan Program, which are ultimately guaranteed by the U.S. Department of Education for at least 97% of defaulted principal plus accrued interest. Higher Education Servicing Corporation acts as master servicer and Higher Education Servicing Corporation; Nelnet Servicing, LLC; Edfinancial Services, LLC; and Aspire Resources Inc. act as subservicers for 100% of the student loans. Pennsylvania Higher Education Assistance Agency acts as backup servicer.

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

The principal methodology is Rating U.S. Federal Family Education Loan Program Securitizations (February 19, 2020), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482/baseline-macroeconomic-scenarios-application-to-credit-ratings.

The rated entity or its related entities did 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.

The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at info@dbrsmorningstar.com.

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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