DBRS Finalizes Provisional Ratings on Purchasing Power Funding 2018-A, LLC

DBRS, Inc. (DBRS) finalized its provisional ratings on the following Series 2018-A Notes issued by Purchasing Power Funding 2018-A, LLC:

-- $134,510,000 Class A, Series 2018-A rated AA (sf)
-- $13,590,000 Class C, Series 2018-A rated BBB (sf)
-- $13,210,000 Class D, Series 2018-A rated BB (low) (sf)

In addition to finalizing the provisional ratings above, due to the increased availability of excess spread, DBRS assigns a final rating of A (high) (sf) to the Class B notes compared with the provisional rating of A (sf) as follows:

-- $13,690,000 Class B, Series 2018-A rated A (high) (sf)

The ratings are based on a review by DBRS of the following analytical considerations:
(1) The transaction’s form and sufficiency of available credit enhancement in the form of excess discount, overcollateralization, subordination and a reserve account.
(2) The credit enhancement present in the transaction was sufficient to withstand stressed cash flow scenarios, with noteholders being paid timely interest and full principal in accordance with the transaction documents.
(3) Inclusion of structural elements featured in the deal, such as the following:
-- Eligibility criteria for receivables that are permissible in the transaction.
-- Concentration limits designed to maintain a consistent profile of the receivables in the pool.
-- Performance-based Rapid Amortization Events that when breached will end the revolving period and begin amortization.
(4) The Seller and Servicer’s capabilities with respect to originations, underwriting and servicing.
(5) The presence of a Back-up Servicer and Back-up Servicer Sub-Agent acceptable to DBRS, capable of taking over servicing responsibilities within 30 days, upon a Servicer Default.
(6) The ability of the transaction’s capital structure to absorb the impact of dilution related to the exposure to returned receivables not repurchased by the seller.
(7) The sufficiency of historical performance data provided and used in the assessment of expected losses.
(8) The inclusion of transaction provisions that sufficiently limit the risks associated with perfection of electronic contracts managed by the transaction sponsor. The legal structure and presence of legal opinions addressing the assignment of collateral assets to the Trust and consistency with the DBRS “Legal Criteria for U.S. Structured Finance.”

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

The principal methodology is Rating U.S. Structured Finance Transactions, including the appendix related to rating U.S Consumer Loan ABS Transactions, which can be found on dbrs.com under Methodologies.

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.

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

The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at info@dbrs.com.