DBRS Morningstar Finalizes Provisional Ratings on College Ave Student Loans 2023-A, LLC

DBRS, Inc. (DBRS Morningstar) finalized its provisional ratings on the following classes of notes (collectively, the Notes) issued by College Ave Student Loans 2023-A, LLC (College Ave 2023-A):

-- $116,080,000 Class A-1 Notes at AAA (sf)
-- $146,680,000 Class A-2 Notes at AAA (sf)
-- $60,160,000 Class B Notes at AA (sf)
-- $49,430,000 Class C Notes at A (sf)
-- $13,120,000 Class D Notes at A (low) (sf)
-- $16,750,000 Class E Notes at BBB (sf)

The ratings are based on a review by DBRS Morningstar 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: April 2023 Update, published on April 28, 2023. These baseline macroeconomic scenarios replace DBRS Morningstar’s moderate and adverse COVID-19 pandemic scenarios, which were first published in April 2020.
-- Transaction capital structure, ratings, and form and sufficiency of available credit enhancement.
-- Transaction cash flows are sufficient to repay investors under all AAA (sf), AA (sf), A (sf), A (low) (sf), and BBB (sf) stress scenarios in accordance with the terms of the College Ave 2023-A transaction documents.
-- The quality and credit characteristics of the student loan borrowers.
-- Structural features of the transaction that require the Notes to enter into full turbo principal amortization if certain minimum parity levels are not maintained.
-- The experience, underwriting, and origination capabilities of College Ave Student Loans, LLC.
-- The ability of the Servicer, University Accounting Service, LLC, to perform collections on the collateral pool and other required activities.
-- The benefits offered by the existence of a Backup Servicer, the Pennsylvania Higher Education Assistance Agency.
-- The legal structure and presence of legal opinions that address the true sale of the student loans, the nonconsolidation of the trust, and that the trust has a valid first-priority security interest in the assets and the consistency with the DBRS Morningstar “Legal Criteria for U.S. Structured Finance.”

College Ave 2023-A uses a traditional pass-through structure with credit enhancement consisting of a reserve account, subordination provided by the Class B Notes, Class C Notes, Class D Notes, and Class E Notes for the benefit of the Class A-1 Notes and Class A-2 Notes, subordination provided by the Class C Notes, Class D Notes, and Class E Notes for the benefit of the Class B Notes, subordination provided by the Class D Notes and Class E Notes for the benefit of the Class C Notes, and subordination provided by the Class E Notes for the benefit for the Class D Notes, and excess spread.

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

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/396929 (May 17, 2022).

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology applicable to the rating is Rating U.S. Private Student Loan Securitizations (October 28, 2022; https://www.dbrsmorningstar.com/research/404500/rating-us-private-student-loan-securitizations).

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

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 .

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

This is a solicited credit rating.

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

DBRS, Inc.
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New York, NY 10005 USA
Tel. +1 212 806-3277

The rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

Rating U.S. Structured Finance Transactions (February 6, 2023)
https://www.dbrsmorningstar.com/research/409449/rating-us-structured-finance-transactions

Interest Rate Stresses for U.S. Structured Finance Transactions (August 30, 2022)
https://www.dbrsmorningstar.com/research/402153/interest-rate-stresses-for-us-structured-finance-transactions

Operational Risk Assessment for U.S. ABS Servicers (April 5, 2023)
https://www.dbrsmorningstar.com/research/412303/operational-risk-assessment-for-us-abs-servicers

Operational Risk Assessment for U.S. ABS Originators (April 5, 2023)
https://www.dbrsmorningstar.com/research/412302/operational-risk-assessment-for-us-abs-originators

Legal Criteria for U.S. Structured Finance (December 7, 2022)
https://www.dbrsmorningstar.com/research/407008/legal-criteria-for-us-structured-finance.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.