Morningstar DBRS Confirms Credit Ratings on SOUND Trust and SAFE Trust Notes at R-1 (high) (sf)

DBRS Limited (Morningstar DBRS) confirmed its credit ratings of R-1 (high) (sf) on the Senior Short-Term Notes, Series 1998-1 issued by SOUND Trust and the Senior Short-Term Notes, Series 1996-1 issued by SAFE Trust (collectively, the Trusts). The credit rating confirmations are based on the addition of a new transaction (Transaction 86) to the Trusts on May 30, 2025.

As part of Morningstar DBRS's ongoing efforts to increase the transparency of reporting asset-backed commercial paper conduit activity, Morningstar DBRS released a transaction summary report providing details of Transaction 86, which consists of a portfolio of retail auto lease receivable contracts and related leased vehicles (passenger cars, compact-utility vehicles (CUVs), sport-utility vehicles (SUVs), and light trucks) originated by a captive auto finance company operating in Canada.

Morningstar DBRS's credit ratings on the Notes addresses the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are any interest and principal associated with the Notes.

Morningstar DBRS's credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations.

Morningstar DBRS's long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS   
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.
 
A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (August 13, 2024; https://dbrs.morningstar.com/research/437781).

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology applicable to the credit ratings is Rating Canadian Equipment Finance Securitization Transactions (September 25, 2024; https://dbrs.morningstar.com/research/439989/).

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

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 under Related Documents or by contacting us at info-DBRS@morningstar.com.

The credit ratings were initiated at the request of the rated entities.

The rated entities or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management and other relevant internal documents of the rated entities or its related entities in connection with this credit rating actions.

These are solicited credit ratings.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website (https://dbrs.morningstar.com/understanding-ratings).

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit 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@morningstar.com.

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 600
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

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

Rating Canadian ABCP and Related Enhancement Features (February 24, 2025; https://dbrs.morningstar.com/research/448506)

Operational Risk Assessments for Canadian Structured Finance (March 28, 2025; https://dbrs.morningstar.com/research/450831)

Legal and Derivatives Criteria for Canadian Structured Finance (August 12, 2024; https://dbrs.morningstar.com/research/437761)

A description of how Morningstar DBRS analyses structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/410863.

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.