DBRS, Inc. (DBRS) assigned a rating of A (sf) to the March 27, 2019, Investment (the Investment) and defined yield created under the Second Receivables Purchase Agreement (the Purchase Agreement) dated September 28, 2017, among AT&T Receivables Funding, LLC as the Seller; New Cingular Wireless PCS, LLC, doing business as AT&T Mobility, as the Servicer, the pool purchaser agents from time to time and the pool purchasers from time to time; and Citibank, N.A. (rated AA (low) with a Stable trend by DBRS) as the Agent. The Investment was made in an amortizing pool of receivables originated by AT&T Mobility for obligors to finance the purchase of mobile phones and was sold by the Seller under the Purchase Agreement.
The rating is based on DBRS’s review of the following analytical considerations:
-- Transaction advance rate, form and sufficiency of available credit enhancement and assigned rating. The transaction benefits from (1) credit enhancement in the form of overcollateralization, implied excess spread and a full turbo structure, in which credit enhancement levels are sufficient to support the DBRS expected loss under various stress scenarios; and (2) other benefits provided by the structured Investment, including (a) a discrete pool of assets via specified selection criteria and (b) the application of conservative assumptions in the stress analysis.
-- DBRS has performed an operational review of the Servicer of the receivables and considers the entity to be an acceptable servicer of handset loans.
-- DBRS was provided sufficient performance data from program-originated contracts.
-- The transaction pool contains high-quality collateral.
-- The legal structure and presence of legal opinions that will address the true sale of the assets to the purchasers; the non-consolidation of the special-purpose vehicles with AT&T Receivables Funding, LLC; and that the purchasers have a valid first-priority security interest in the assets and are consistent with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.
All figures are in U.S. dollars otherwise noted.
The principal methodology is Rating U.S. Structured Finance Transactions, including Appendix I: U.S. Consumer Loan ABS Transactions, which can be found on dbrs.com under Methodologies & Criteria.
This rating was not initiated at the request of the rated entity.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
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