DBRS Morningstar Assigns Provisional Ratings to Brazos Education Loan Authority, Inc. Series 2021-2

DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following series of notes to be issued by Brazos Education Loan Authority, Inc. Series 2021-2 (BELA 2021-2):

-- Up to $115,850,000 Class A-1A Notes rated AAA (sf)*
-- Up to $579,250,000 Class A-1B Notes rated AAA (sf)*

*The maximum principal amount of the Class A-1A Notes that will be issued is $115,850,000. The minimum principal amount of the Class A-1B Notes that will be issued is $463,400,000. The Class A Notes will be issued in an amount of $579,250,000.

The provisional 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 servicers 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 expected legal opinions.

The collateral securing BELA 2021-2 will consist 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. Pennsylvania Higher Education Assistance Agency, and Nelnet Servicing, LLC will act as the servicers for 100% of the BELA 2021-2 student loans.

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.

DBRS, Inc.
140 Broadway, 43rd Floor
New York, NY 10005 USA
Tel. +1 212 806-3277