DBRS Morningstar Upgrades Rating on Hannover Funding Company LLC

DBRS, Inc. (DBRS Morningstar) upgraded its rating on Hannover Funding Company LLC’s 4(2) Commercial Paper to R-1 (middle) (sf) from R-1 (low) (sf).

The rating actions are based on the following analytical considerations:

-- DBRS Morningstar’s Financial Institutions Group upgraded the ratings on Norddeutsche Landesbank Girozentrale (NORD/LB) to R-1 (middle) with a Stable trend.

-- NORD/LB provides full support for each transaction within the conduit.

-- The legal construct of the ABCP conduit.

-- Given the nature of the credit support within this asset-backed commercial paper (ABCP) conduit, the coronavirus pandemic has limited impact. DBRS Morningstar does not believe that additional stresses are warranted in the analysis at this time.

-- 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 pandemic scenarios, which were first published in April 2020. The baseline macroeconomic scenarios reflect the view that, although coronavirus 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 coronavirus may nonetheless bring other risks to the forefront in coming months and years.

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:
The principal methodology is Rating and Monitoring Asset-Backed Commercial Paper: U.S. ABCP Conduits (January 21, 2021), 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.

This rating is endorsed by DBRS Ratings Limited for use in the United Kingdom, and by DBRS Ratings GmbH for use in the European Union, respectively. The following additional regulatory disclosures apply to endorsed ratings:

The last rating action on this transaction took place on December 1, 2020, when DBRS Morningstar confirmed the rating on Hannover Funding Company LLC at R-1 (low) (sf).

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage: https://www.fca.org.uk/firms/credit-rating-agencies.

Lead Analyst: Matthew La Capra, Senior Vice President, U.S. ABS, Global Structured Finance
Rating Committee Chair: Tim O’Neil, Managing Director, Head of Canadian Structured Finance, Global Structured Finance
Initial Rating Date: August 29, 2016

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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-- Rating and Monitoring Asset-Backed Commercial Paper: U.S. ABCP Conduits (January 21, 2021)
https://www.dbrsmorningstar.com/research/372577/rating-and-monitoring-asset-backed-commercial-paper-us-abcp-conduits