Document Title

spglobal.com/ratings This report does not constitute a rating action Oct. 5, 2021 1

ANALYTICAL CONTACTS

Ildiko Szilank New York ildiko.szilank@spglobal.com Jay Srivats San Francisco jay.srivats@spglobal.com

DATA VISUALIZATION CONTACT

Deegant Pandya New York deegant.pandya@spglobal.com Bushra Dawawala Mumbai bushra.dawawala@spglobal.com RESEARCH CONTACTS

Tom Schopflocher New York tom.schopflocher@spglobal.com James Manzi, CFA Washington D.C. james.manzi@spglobal.com RESEARCH SUPPORT CONTACT

Saryu Kamra Pune saryu.kamra@spglobal.com Ishan Shankar Pune ishan.shankar@spglobal.com

INVESTOR CONTACT

Kieran McShane New York kieran.mcshane@spglobal.com MEDIA CONTACT

Obrien, Orla orla.obrien@spglobal.com

Oct. 5, 2021

Data as of Sept. 15, 2021. FY–full-year. Source: S&P Global Ratings.

S&P Global Ratings’ U.S. non-traditional ABS team assigns and monitors ratings on securities collateralized by

pools of a diverse range of assets, including aircraft, marine shipping containers, railcars, triple-net and data

center leases, solar loans, master settlement tobacco payments, insurance premiums, franchise royalty

payments, timeshare loans, and small business loans, among others.

Key Takeaways − Year to date (YTD), S&P Global Ratings rated 53 new non-traditional ABS transactions, which

is over 145% and 140% of the issuance volume in the first three quarters of 2020 and 2019, respectively.

− We issued ratings on a solar loan-backed ABS transaction, GoodLeap Sustainable Home Solutions Trust Series 2021-4; a new data center program, Aligned Data Centers Issuer LLC; and a new triple-net program, CMFT Net Lease Master Issuer LLC.

− YTD, S&P Global Ratings took rating actions on 57 transactions. We affirmed ratings on 39 of these, lowered ratings on three, and raised ratings on 15. We also completed annual reviews on 245 transactions.

− Environmental, social, and governance (ESG)-related credit rating actions affected two aircraft securitizations, Harbour Aircraft Investments and Merlin Aviation Holdings.

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 2

RELATED RESEARCH

Credit FAQ: Ratings Considerations For New Aircraft ABS Securitizations, March 16, 2021 Recent Developments In The Tobacco Securitization Market, May 19, 2021

Criteria | Structured Finance | ABS: Advance Notice Of Proposed Criteria Change: North American Single-Tenant Real Estate Triple-Net Lease-Backed Securities Sept. 7, 2021

PRESALES

Sabey Data Center Issuer LLC, July 1, 2021 CMFT Net Lease Master Issuer LLC, July 15, 2021

ServiceMaster Funding LLC, July 23, 2021 Aligned Data Centers Issuer LLC, Aug. 5, 2021 Goodleap Sustainable Home Solutions Trust 2021-4, Aug. 5, 2021

Highlights Of Q3 2021U.S. Non-Traditional ABS Rating Activity In the third quarter of 2021, S&P Global Ratings’ Non-Traditional ABS group rated 36 new-issue transactions, performed annual surveillance reviews on 245 transactions across 10 sectors, and took actions on 57 transactions.

First new solar loan-backed ABS ratings in six years

We rated notes from a solar loan-backed ABS transaction for the first time since 2015. GoodLeap Sustainable Home Solutions Trust Series 2021-4 is collateralized by loans backed by residential solar energy and storage systems, where the systems are owned by the residential obligors. In contrast, four of the five prior-rated solar securitizations, all sponsored by the former SolarCity (now Tesla Energy), are backed by leases and power purchase agreements (PPAs) for third-party-owned systems (TPO), where customer payments are a function of the amount of electricity produced.

New data center issuer

We rated Aligned Data Centers Issuer LLC's inaugural data center revenue notes series 2021-1, collateralized by wholesale data centers in Texas, Arizona, Utah, and Virginia and their tenant leases. The vast majority of Aligned's data centers are leased by hyperscale tenants, which typically require 500 kilowatts (kW) or more of capacity to operate their computing equipment and networks. These bonds were designated as green bonds based on the Capital Markets Association's classification of market principles.

New triple-net lease issuer

We rated CMFT Net Lease Master Issuer LLC’s first ABS issuance (series 2021-1), sponsored by affiliates of CIM Group LLC and backed by 119 commercial retail and industrial real estate properties and related leases. The properties are considered operationally essential to the tenants to generate revenue, and about 45% of the collateral pool (by appraisal value) has investment-grade tenants.

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 3

New Issuance Continues Post-Pandemic Momentum While Ratings Remain Relatively Stable YTD, S&P Global Ratings rated 53 new non-traditional ABS transactions, which is over 145% and 140% of the issuance volume in the first three quarters of 2020 and 2019, respectively. We believe that increased interest in non-traditional ABS reflect higher yield combined with generally steady performance and resilience during COVID-19 for most sectors. As of Sept. 15, 2021, over 88% of our portfolio is of investment-grade quality (rated 'BBB-' or higher) by number of bonds.

YTD 2021 New Issuance Bonds By Rating Category

Data as of Sept. 15, 2021. Source: S&P Global Ratings.

AAA9%

AA1%

A51%

BBB33%

BB5%

B1%

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 4

Non-Traditional ABS Sector New Issuance Volume By Quarter (Number Of Deals)

Data as of September 15, 2021. Source: S&P Global Ratings.

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 5

YTD, S&P Global Ratings took rating actions on 57 transactions from nine asset classes. We affirmed ratings on 39 of these, lowered ratings on three, and raised ratings on 15. We also completed annual reviews on 245 transactions.

Surveillance Rating Actions: Upgrades, Downgrades, And Affirmations

Data as of Sept 15, 2021. The number of triangles indicates the number of notches the ratings were lowered or raised. Source: S&P Global Ratings.

Downgrades

Affirmations

Upgrades

Total Bonds

Aircraft Leasing 3 2 7 12

Corporate Securitization

29 2 31

Insurance Related 21 21

Leveraged Fund 2 1 3

Railcar Leasing 4 4

Small Business Loans

1 1

Solar Securitization 4 4

Tobacco Settlement 4 195 13 1 2 215

Triple-Net Lease 4 4

Total 3 2 4 267 16 1 2 295

Annual Review Update

As of Sept. 15, 2021, we completed annual reviews on 245 transactions. In an annual review, S&P Global Ratings reviews current credit ratings against the latest issuer/issue performance data, as well as any recent market developments. Annual reviews may, depending on their outcome, result in a referral of a credit rating for a committee review, which may result in a credit rating action.

RATINGS ACTION PRESS RELEASES

TGIF Funding LLC Series 2017-1 Ratings Unchanged By Rapid Amortization Waiver, June 25, 2021

CMFT Net Lease Master Issuer LLC Series 2021-1 Notes Assigned Ratings, Jul 29, 2021

CIM Retail Portfolio Trust 2021-RETL Certificates Assigned Ratings, Aug. 9, 2021

Two SolarCity LMC Series III LLC Series 2014-2 Ratings Affirmed, Aug. 18, 2021

Merlin Aviation Holdings DAC Class A, B, And C Notes Lowered; Off CreditWatch, Sept. 3, 2021 GoodLeap Sustainable Home Solutions Trust 2021-4 Notes Assigned Ratings, Sept 8, 2021

Outstanding deals completed

61%

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 6

Sector Highlights

Triple-net lease

S&P Global Ratings has begun a review of our criteria for rating North American single-tenant triple-net lease-backed transactions, as announced in "Advance Notice Of Proposed Criteria Change: North American Single-Tenant Real Estate Triple-Net Lease-Backed Securities," Sept. 7, 2021. The review will consider the evolution of triple-net securitizations, such as in asset type and transaction structure, since we published the criteria in 2016. It will also incorporate observations of asset performance since then. Based on our review, we may refine our assumptions and analytics.

New issuance In addition to CIM Real Estate Finance Operating Partnership L.P. (S&P Global Ratings' first rated triple-net securitization for this issuer), we rated five other triple-net ABS new issues out of existing trusts in 2021 YTD. While transactions with exposure to certain business segments, including full-service dining, child care, and fitness centers, exhibited lower transaction debt-service coverage multiples due to stress in early 2020 amid mandated closures and social distancing, performance has since rebounded to pre-March 2020 levels for most transactions.

Surveillance YTD, we affirmed four ratings on notes from a single transaction with a current balance of $1.93 billion, representing 5% of our rated book in this sector.

Data centers

New Issuance In addition to the inaugural Aligned 2021-1 data center securitization, we assigned ratings to subsequent series of data center-backed bonds from Sabey, Compass, and Stack Data Center Issuers YTD. The wholesale data center industry has generally seen strong growth in customer demand since early 2020 as increased demand for remote-work capabilities, driven by the pandemic, added to existing growth drivers, including continued corporate migration of data center infrastructure to public cloud service providers.

Aircraft

New Issuance We rated our first aircraft lease securitizations since the onset of the COVID-19 pandemic: MAPS 2021-1 Trust in June 2021 and Castlelake Aircraft Structures Trust 2017-1R in August 2021. Both transactions consist of a number of aircrafts that are subject to power by the hour (PBH) lease agreements. PBH agreements became increasingly common during the height of COVID-19 when airlines struggled to make lease payments due to the sharp reduction in capacity. These agreements enable lessors to provide temporary rent relief to airlines and avoid the cost of repossession. We have seen arrangements with a guaranteed minimum amount due for a period and then convert to a fixed amount with no required minimum amounts. In our analysis, we give credit to minimums and do not consider projected PBH payments. We continue to apply additional stresses to these transactions, including increased downtime after the unprecedented decline in air travel.

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 7

Surveillance YTD we reviewed six bonds from two deals, with a current balance of $418 million, representing 6% of our rated book in this sector. We lowered five ratings on Harbour Aircraft Investments Ltd. and Merlin Aviation Holdings DAC, and removed them from CreditWatch with negative implications. The downgrades reflect the advanced age of the aircraft and the continued deterioration in cash flows during the pandemic, which has resulted in minimal payment of principal on the notes.

Container and railcar securitization

New Issuance In Q3 2021, we rated one new railcar ABS transaction and one new container ABS transaction. Utilization and lease rates remain at relatively high levels, especially in the container space, and most of the outstanding ABS transactions continue to pay down according to schedule. Surveillance YTD, we reviewed ratings on four bonds from one deal, with a current balance of $428 million, representing 10% of our rated book in the railcar sector.

Whole business ABS (corporate securitization)

New Issuance The corporate securitization new-issuance market has been active in 2021, with S&P Global Ratings assigning ratings on notes issued from eight existing programs YTD. In contrast, we rated seven new issuances through all of 2020. We observed that most of the domestic quick service restaurants recovered quickly from the temporary closures resulting from the pandemic. Many of the other S&P Global Ratings-rated issuers, primarily service providers, also proved resilient, as they offer essential services such as car maintenance and residential/commercial cleaning. We continue to closely monitor concepts with slower recovery, such as gyms, dine-in restaurants, and international stores.

Surveillance YTD, we reviewed 31 bonds from 16 deals, with a current balance of $13.1 billion, representing 38% of our rated book in this sector. We affirmed our ratings on 29 bonds and upgraded ratings on two, on the basis of the respective transactions’ brand strength, cash flow coverage, and liquidity, among other factors.

Solar ABS

New Issuance We rated a new solar loan deal, GoodLeap Sustainable Home Solutions Trust Series 2021-4, in Q3.

Surveillance YTD, we reviewed four bonds from two deals, with a current balance of $189 million, representing 40% of our rated book in the sector. In 2021, we observed an increase in cumulative customer defaults on two solar assets-backed bonds. While this brought the transaction's DSCR down slightly, the cumulative defaults remain well below our projections for the transaction at the 'BBB+ (sf)' and 'BB (sf)' levels and, therefore, we affirmed those ratings.

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 8

Insurance Premium ABS

Surveillance YTD, we reviewed 21 bonds from 10 deals, with a current balance of $3.5 billion, representing 91% of our rated book in the sector. We affirmed 21 ratings from PFS Financing Corp. backed by insurance premium finance loans. The affirmations were based on our view of the transactions' ability to pass the current rating level stresses given the new series 2021-B issuance out of the same master trust.

ESG In Non-Traditional ABS Through 2021, S&P Global Ratings has taken ESG-based credit rating actions related to health and safety factors in the aviation sector. The rating actions reflect the prolonged negative impact of the COVID-19 pandemic on world travel and the resulting stress on airlines' liquidity and ability to make timely lease payments. There are two notable actions that involved significant ESG analysis.

In February 2021, we placed the ratings on the Harbour Aircraft Investments aircraft securitization series A, B, and C bonds on CreditWatch with negative implications. The CreditWatch placement reflected, among other things, the negative impact of the pandemic on world travel, along with a continued steep decline in rental collections. We subsequently lowered the ratings of class A and B and affirmed the rating of class C in May 2021. The downgrades reflected insufficient credit enhancement at the respective rating levels.

In September 2021, we lowered our ratings on Merlin Aviation Holdings class A, B, and C notes and removed the ratings from CreditWatch with negative implications. The rating actions reflect the notes' insufficient credit enhancement at their respective previous rating levels based on our assumptions and sensitivity analysis, among other factors.

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 9

Rated Non-Traditional Universe: No. Of Bonds Per Rating Category By Sector

Sectors AAA A-1 AA A-2 A BBB BB B CCC CC/C Grand Total

Tobacco Settlement 324 68 12 15 19 438

Timeshare 29 5 48 42 16 1 141

Gas Prepay 48 88 136

Stranded Assets 129 129

Aircraft And Aircraft Engine

Lease Securitizations 2 12 25 27 21 6 2 95

Corporate Securitization 80 2 82

Triple-Net Lease 22 7 34 13 76

Small Business Loan 6 11 13 2 4 15 12 63

Leveraged Fund 17 37 3 57

Container Lease 21 20 41

Railcar Lease 27 11 1 39

Structured Settlements 15 5 11 31

Insurance Related 12 11 23

Data Center 19 3 1 23

Solar Securitization 1 6 3 10

Equity & Hedge Fund CFO 3 3

PACE 2 2

Drug Royalty 2 2

Data as of Sept 15, 2021. PACE - Property Assessed Clean Energy. Source: S&P Global Ratings.

Principal Interests SF Insights: Non-Traditional ABS

spglobal.com/ratings Oct. 5, 2021 10

Copyright © 2021 by Standard & Poor's Financial Services LLC. All rights reserved. No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&Ps opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses. To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process. S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.capitaliq.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.