Morningstar DBRS Confirms Credit Ratings on Two Merchants Fleet Funding LLC Transactions

DBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on eight securities issued by two Merchants Fleet Funding LLC transactions as follows:

-- Merchants Fleet Funding LLC, Series 2022-2, Class A at AAA (sf)
-- Merchants Fleet Funding LLC, Series 2022-2, Class B at AA (sf)
-- Merchants Fleet Funding LLC, Series 2022-2, Class C at A (sf)
-- Merchants Fleet Funding LLC, Series 2023-1, Class A Notes at AAA (sf)
-- Merchants Fleet Funding LLC, Series 2023-1, Class B Notes at AA (sf)
-- Merchants Fleet Funding LLC, Series 2023-1, Class C Notes at A (sf)
-- Merchants Fleet Funding LLC, Series 2023-1, Class D Notes at BBB (sf)
-- Merchants Fleet Funding LLC, Series 2023-1, Class E Notes at BB (sf)

The confirmations are based on the following analytical considerations:

-- The transaction assumptions consider Morningstar DBRS’ baseline macroeconomic scenarios for rated sovereign economies, available in its commentary “Baseline Macroeconomic Scenarios for Rated Sovereigns: December 2023 Update,” published on December 19, 2023. These baseline macroeconomic scenarios replace Morningstar DBRS’ moderate and adverse COVID-19 pandemic scenarios, which were first published in April 2020.

-- The transactions’ capital structure and form and sufficiency of available credit enhancement.

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

-- The credit quality of the collateral pool and historical performance, with low delinquencies and charge-offs to date.

-- The credit ratings address timely payment of interest on the notes as well as the ultimate payment of principal by legal final maturity.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (July 4, 2023) at https://dbrs.morningstar.com/research/416784.

Notes:
The principal methodology applicable to the credit ratings is DBRS Morningstar Master U.S. ABS Surveillance (October 22, 2023), https://dbrs.morningstar.com/research/422279.

Other methodologies referenced in this transaction are listed at the end of this press release.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

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

DBRS, Inc.
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The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- Operational Risk Assessment for U.S. ABS Servicers (July 20, 2023),
https://dbrs.morningstar.com/research/417415

-- Operational Risk Assessment for U.S. ABS Originators (July 20, 2023),
https://dbrs.morningstar.com/research/417416

-- Interest Rate Stresses for U.S. Structured Finance Transactions (June 9, 2023),
https://dbrs.morningstar.com/research/415687

-- Legal Criteria for U.S. Structured Finance (December 7, 2023),
https://dbrs.morningstar.com/research/425081

-- Rating U.S. Structured Finance Transactions (October 30, 2023),
https://dbrs.morningstar.com/research/422592

-- Rating U.S. Auto Fleet Lease Securitizations (September 25, 2023),
https://dbrs.morningstar.com/research/421024

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.