Rating Raised On Mariner Finance Issuance Trust 2017-A Class A Notes


  • We reviewed the Mariner Finance Issuance Trust 2017-A issuance, which is backed by personal consumer loan receivables.
  • We raised our ratings on the class A notes to 'A (sf)' from 'BBB+ (sf)'.
  • The rating actions reflect collateral performance to date, our views regarding future collateral performance, and the transaction's structure and credit enhancement, among other factors.
NEW YORK (S&P Global Ratings) April 17, 2019--S&P Global Ratings today raised 
its rating on Mariner Finance Issuance Trust 2017-A's (MFIT 2017-A's) class A 
notes to 'A (sf)' from 'BBB+ (sf)'.

The raised rating reflects collateral performance to date and our expectations 
regarding future collateral performance, as well as the transaction's 
structure and credit enhancement. Our analysis also incorporated secondary 
credit factors, including credit stability, payment priorities under various 
scenarios, and sector- and issuer-specific analyses. At new issuance our 
operational risk assessment for Mariner Finance LLC capped our maximum rating 
at 'BBB+ (sf)'; since that date we have raised our rating cap to 'A (sf)' (for 
a review of our rating cap rationale see "Presale: Mariner Finance Issuance 
Trust 2017-A" and "Presale: Mariner Finance Issuance Trust 2018-A," published 
Feb. 9, 2017, and Nov. 1, 2018, respectively). Considering all of these 
factors, we believe the notes' creditworthiness is consistent with the raised 
rating level.

The transaction was structured with a two-year revolving period and entered 
scheduled amortization on Jan. 31, 2019. Our original base-case modeling 
assumed the pool would revolve to a worst-case composition; however, although 
weaker than the initial pool, the composition has consistently been stronger 
than the worst-case concentrations. This has contributed to better than 
initially expected loss performance. As a result of the current pool 
composition, in comparison to the worst-case pool, we revised our base-case 
loss assumption to 20.10%, down from 21.40% at new issuance. As of the March 
2019 distribution date, the annualized three-month net loss percentage for 
MFIT 2017-A was 9.82%. 

The transaction contains a sequential principal payment structure in which the 
notes are paid principal by seniority. The transaction also benefits from 
credit enhancement in the form of a nonamortizing reserve account, 
overcollateralization, subordination for the higher-rated tranches, and excess 
spread. 

Hard Credit Support (%)
As of the March 2019 distribution date
                    
MARINER FINANCE ISSUANCE TRUST 2017-A

            Total hard    Current total hard
        credit support        credit support
Class   at issuance(i)     (% of current)(i)
A                26.07                 28.69
B                18.22                 20.05
C                11.80                 12.98

(i)Calculated as a percentage of the total gross receivable pool balance, 
consisting of a reserve account, overcollateralization, and subordination. 

We incorporated a cash flow analysis and applied stress assumptions to 
simulate rating scenarios appropriate for the raised rating. Our cash flow 
scenarios give credit to excess spread, and include assumptions on recoveries 
and voluntary prepayment speeds that we believe are appropriate given the 
transaction's performance to date. As of the March 2019 distribution date, the 
weighted average coupon of the receivables pool for MFIT 2017-A was 29.21%, 
though our cash flow scenarios were conservatively run at the reinvestment 
criteria trigger level of 24.50%. We also conducted sensitivity analyses to 
determine the impact that a moderate ('BBB') stress scenario would have on our 
rating if losses began trending higher than our revised base-case loss 
expectation.

The upgrade reflects our view that the total credit support as a percentage of 
the pool balance, compared with our expected remaining losses is commensurate 
with the raised rating.

We will continue to monitor the performance of the transaction to ensure that 
the credit enhancement remains sufficient, in our view, to cover our net loss 
expectations under our stress scenarios for each of the rated classes.
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