DBRS Assigns Ratings to DRB Prime Student Loan Trust 2016-R

DBRS, Inc. (DBRS) has today assigned ratings of A (sf) to the Class A Notes issued by DRB Prime Student Loan Trust 2016-R (DRB 2016-R). The ratings of the Class A Notes, as follows, address the timely payment of interest and the full payment of principal in accordance with the terms and conditions of the DRB 2016-R transaction documents.

-- $38,276,000 Class A-1 Notes at A (sf).
-- $57,414,000 Class A-2 Notes at A (sf).

The finalized ratings are based on DBRS’s review of the following analytical considerations:

-- The transaction’s form and sufficiency of available credit enhancement.
-- The quality and credit characteristics of the loan borrowers.
-- Structural features of the transaction that require the Class A Notes to enter into full turbo principal amortization if certain performance triggers are breached.
-- DRB’s capabilities with regards to originations and underwriting.
-- The ability of the Servicer to perform collections on the collateral pool and other required activities.
-- The legal structure and legal opinions that address the true sale of the student loans, the non-consolidation of the trust, and that the trust has a valid first-priority security interest in the assets and consistency with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.

The collateral securing DRB 2016-R will consist of private student loans originated by Darien Rowayton Bank (DRB). The $95.7 million DRB 2016-R transaction represents DRB’s seventh securitization of student loans, and the seventh DRB securitization rated by DBRS.

The transaction consists entirely of student loans to medical residents under DRB’s medical residency loan program. Borrowers enrolled in this program and employed full-time as intern, resident, or fellow are required to pay only a nominal monthly amount for the entire duration of the post-graduate training and up to six months following the end of training.

Credit enhancement is provided to the Class A Notes in the form of subordination, overcollateralization, excess spread and a reserve account. To account for the risk of reduced cash flows from borrowers still in their residency periods, the reserve account will initially equal 4.91% of the Notes.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodology is Rating U.S. Private Student Loan Securitizations, which can be found on our website under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities

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