DBRS Morningstar Assigns Provisional Ratings to Pawnee Equipment Receivables (Series 2021-1) LLC Asset Backed Notes.

ENPNewswire-October 13, 2021--DBRS Morningstar Assigns Provisional Ratings to Pawnee Equipment Receivables (Series 2021-1) LLC Asset Backed Notes

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Release date- 12102021 - DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following classes of notes (the Notes) to be issued by Pawnee Equipment Receivables (Series 2021-1) LLC (the Issuer).

$86,260,000 Class A-1 Notes at R-1 (high) (sf)

$198,740,000 Class A Notes at AAA (sf)

$28,310,000 Class B Notes at AA (sf)

$13,300,000 Class C Notes at A (sf)

$15,200,000 Class D Notes at BBB (sf)

$14,253,000 Class E Notes at BB (low) (sf)

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

Transaction capital structure, proposed ratings, and sufficiency of available credit enhancement, which includes overcollateralization, subordination, and amounts held in the reserve account, to support the DBRS Morningstar-projected cumulative net loss (CNL) assumption under various stressed cash flow scenarios.

The respective coverage multiples of the expected CNL, which are afforded to each class of Notes by the available credit enhancement. Under various stressed cash flow scenarios, credit enhancement can withstand the expected loss using DBRS Morningstar multiples of 5.40 times (x) with respect to the Class A Notes and 4.40x, 3.55x, 2.50x, and 1.65x with respect to the Class B, C, D, and E Notes, respectively. DBRS Morningstar assumes an expected base-case CNL of 4.15% for this transaction.

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 the 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...

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