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This new issue report summarizes Kroll Bond Rating Agency’s (KBRA) analysis of Brex Commercial Charge Card Master Trust, Series 2022-1 (“Brex 2022-1” or “Series 2022-1”), a corporate charge card ABS transaction. The report is based on information available as of March 30, 2022. This report does not constitute a recommendation to buy, hold, or sell securities. Brex Inc. (“Brex” or the “Company”) is the Sponsor, Servicer, Administrator, and Seller for Brex 2022-1. Brex was founded in January 2017 and offers financial products and services to small and medium-sized businesses through the Brex charge card program . According to the Company, as of December 31, 2021, its corporate charge card portfolio was comprised of over 28,500 corporate charge card customers with an outstanding receivable balance of approximately $544 million. Since launching the card product, Brex has processed over $15.1 billion of cumulative gross merchandise value (“GMV”) across all of its charge card products. Brex is a remote-first company with over 1,000 employees, but has offices in San Francisco, CA, New York, NY and Draper, Utah as well as operations through its subsidiaries in Canada, Brazil and Israel. Brex 2022-1, represents the Company’s third series issued out of Brex Commercial Charge Card Master Trust (“Master Trust”) and sponsored by Brex with the first offering being the Series 2021-1 Notes (“Brex 2021-1”) issued in April 2021. In addition, Series 2021-A, a variable funding loan, was issued out of the Master Trust in July 2021. The Series 2021-1, Series 2021-A and Series 2022-1 Notes are collateralized and expected to be repaid by a shared portfolio of non-revolving corporate charge card accounts and receivables created from those accounts. Additional series may be issued from the Master Trust from time to time that will have rights to the collateral in the trust. New series that are specifically collateralized by accounts and receivables designated to group-specific collateral may also be issued out of the Master Trust. The charge card is a non-revolving corporate charge card specifically designed for growing and newly formed businesses (“Customers”) with high cash balances. The charge card includes embedded financial tools such as expense management, spend control, and integrated connectivity for reconciliation through Customers’ accounting software. Brex uses technology and its underwriting models to assess credit risk of technology enabled growth businesses who may have been prevented from accessing traditional card services. Brex sets a Customer’s credit limit based on a percentage of the business’s available cash balance accessible to Brex and revenue rather than the business’s credit history. The Company monitors cash balances accessible to Brex and business transactions, for a majority of its Customers on a real-time basis through a direct link to the Customer’s account and adjusts credit limits accordingly. The term s of the charge card require Customers to pay their outstanding balance in full at the end of each monthly statement period. Brex automatically collects any balance due directly from Customers’ bank accounts using ACH and does not rely on Customers to pay their balance manually. Brex does not charge interest on unpaid balances and does not currently charge late fees. Customers with unpaid, past-due statements are unable to make additional purchases with their card until they become current. The accounts are opened through the Brex platform in accordance with the Company’s credit risk policy, and ultimately approved and originated through its partner bank relationships with Emigrant Bank and Fifth Third Bank National Association (together the “Account Owners”). Brex has stated that it will start issuing accounts with Fifth Third Bank in Q2 2022. Brex is the Servicer and will be responsible for servicing and administering the receivables, and Nelnet Servicing, LLC will be the Backup Servicer. Brex 2022-1 includes a revolving period of approximately 23 months where no principal payments will be made on the notes unless an Early Amortization Event occurs. Brex 2022-1 issued two classes of notes in an aggregate principal amount of $185 million. Credit enhancement on the notes consists of: i) overcollateralization, ii) subordination (except for the class B notes), iii) a reserve account funded at closing, and iv) excess spread generated by discounting the pool balance. Rated Notes Class Initial Amount ($) Interest Rate Final Scheduled Payment Date Initial Credit Enhancement KBRA Rating Class A 180,500,000 4.63% Jul 15, 2025 4.86% A (sf) Class B 4,500,000 8.50% Jul 15, 2025 2.47% B (sf) Total 185,000,000 Brex Commercial Charge Card Master Trust Series 2022-1 4 March 30, 2022 The transaction parties for the Brex 2022-1 are listed below: Transaction Parties Issuing Entity Brex Commercial Charge Card Master Trust Transferor Brex ABS LLC Sponsor, Seller, Servicer, and Administrator Brex Inc. Account Owners Emigrant Bank (“Emigrant”) and Fifth Third Bank, National Association (“Fifth Third”) Backup Servicer Nelnet Servicing, LLC (“Nelnet”) Owner Trustee Wilmington Trust Company Indenture Trustee Wilmington Trust, National Association Key Credit Considerations Experienced Management Team The Company’s senior management team is led by individuals with relevant experience in fintech, traditional financial services, and small business lending. Management has a combined over 60 years of experience in areas of financial services that include: payments, underwriting, collections, servicing, legal/compliance, and marketing and have been with Brex on average [2.5] years. The Management Overview section in this report provides more details on the Company’s management team. + Charge Card Transaction This corporate charge card transaction is unique in comparison to a revolving credit card ABS transaction. Unlike those transactions, the Brex charge card does not allow for revolving balances, rather the card balance is due in full at the end of each monthly statement period. Each month, the Company must generate sufficient GMV through card usage to support the notes and generate interchange income for Brex. If businesses reduce spending or choose not to use the Brex card, the receivables balance supporting the transaction may fall precipitously which may impact transaction cash flows and/or the financial performance of the Servicer. This risk is mitigated by the discount factor applied to the receivable balance, the transaction structure, and related services which connect to the Customer’s financial systems. The stable GMV is partly attributable to the high proportion of charges attributed to recurring monthly expenses that are critical to the Customer’s business. Additionally, as noted card usage is positively influenced by Brex’s integration into the Customer’s accounting systems and internal process es used to process and track employee expense reports. The program’s Customers also benefit from a rewards program based on purchase volume. If payment rates remain high, card usage decreases and the trust does not have sufficient receivables to purchase, an Asset Deficiency Early Amortization Event could occur, further leading to collections remaining in the Series 2022-1 Collection Sub-Account and acceleration of repayment of the notes. -/+ Underwriting Criteria & Dynamic Credit Limits Brex utilizes a proprietary underwriting model for its charge card product, which it began originating in 2018. Customers are generally required to have a bank account linked to Brex’s internal system. This allows Brex to review income trends, dynamically adjust credit limits based on the cash balance in a Customer’s linked bank account and debit amounts due on each payment date. Customers that do not have a linked account are underwritten based on bank statements. These accounts represent a small percentage of the Brex portfolio, but are generally extended to larger, more established businesses with higher average cash balances, and higher cash balance multiples relative to their credit limit. Brex utilizes credit criteria for approving or rejecting applications for its charge card. Automatic rejections are based on minimum cash balances, or if the business is a sole proprietorship, among + Brex Commercial Charge Card Master Trust Series 2022-1 5 March 30, 2022 other factors. Brex makes credit decisions and determines credit limit amounts based on the stability and amount of cash in the Customer’s linked accounts. In late 2021, the Company made several improvements to its underwriting process through enhanced model analytics that used in determining credit decisions and credit limits, along with consideration of multiple internal and external factors. Additional information on the Company’s Underwriting process is available in the Originations and Underwriting section. Brex re-assesses the Customer’s risk profile as often as daily based on data observed in a Linked Bank Account and adjusts the Customer’s credit limits periodically in response to changes deemed material in the Customer’s underwriting cash balance or its cash balance factor. Brex will not process new transactions if a Customer’s account balance exceeds its credit limit or if a Customer’s limit is lowered below its outstanding card balance. The Servicer is able to collect on the over-limit amount immediately (regardless of when the Customer’s next statement is due). As of the March 2, 2022 Information Date (“Information Date”), 90% of the total principal balance represented Customers that had at least four times as much cash in their linked account compared to their credit limits and approximately 50% of the total principal balance represented customers that had at least 10 times as much cash in their linked account compared to their credit limits. High cash coverage ratios, real-time monitoring, dynamically adjusting credit limits, ACH payments and the ability to withdraw amounts due for overdrawn lines is a key factor to their low historical default rates and high payment rates. Interchange and Rewards Brex does not charge interest on unpaid balances and does not currently charge late fees. Brex generates revenue from interchange income, which is earned from the payment network based on the GMV of Customers’ spending on their cards. Interchange is compensation for taking credit risk, absorbing fraud losses, funding receivables and servicing cardholder accounts. Interchange in connection with cardholder charges for merchandise and services is collected by the MasterCard system and subsequently paid to the credit card-issuing banks (in this case Emigrant and Fifth Third). Interchange fees range from approximately 1% to 3% of the transaction amount. Each Account Owner is entitled to interchange fees associated with the transactions giving rise to the receivables and assigns such interchange fees to Brex pursuant to the applicable program agreement. Interchange fees will be retained by Brex and will not be treated as Collections and will not be conveyed to the Issuing Entity. Brex corporate charge card programs include a Customer rewards program that allows Customers to redeem rewards in the form of statement credits, services, or cash back. To the extent the outstanding amount of any receivable is reduced by the Servicer due to the redemption of a program reward in the form of a statement credit, the Servicer will adjust the receivable balance by such amount. Brex, as Servicer will reimburse the transaction for such adjustment. If Brex does not make the reimbursement, the amount will be drawn from the reserve account and deposited to Collections to cure the Asset Deficiency. -/+ Limited Performance History Brex has provided historical performance data on its corporate charge card portfolio since January 2019, when the product was launched. Although the length of performance history is relatively limited, at 36 months, the Company’s charge-off on its receivables in a single month has been at most approximately 1.0%.Brex focuses on Customers with high cash balances and sets a Customer’s credit limit based on a percentage of the Customer’s available cash balance and revenue rather than any individual’s credit history. In most cases, cash balances are monitored on a real-time basis through a direct link to the businesses bank account and credit limits are adjusted periodically in response to changes deemed material in the Customers’ underwriting cash balance or its cash balance factor. Since Brex’s charge card requires a payment of the full balance each month, each collection period provides a full vintage payment cycle and quicker performance feedback compared to longer term assets. - Brex Commercial Charge Card Master Trust Series 2022-1 6 March 30, 2022 Transaction Structure The charge card receivables are due each month and do not generate interest. As a result, the Trust Principal Balance of all receivables is discounted (“Discounted Principal Balance”) to provide excess cash flow and protection to the noteholders. The transaction has initial credit enhancement levels of 4.86% for the Class A notes and 2.47% for the Class B notes. Credit enhancement is comprised of overcollateralization, subordination of the Class B Notes, and a reserve account funded at closing equal to $1,447,688 or approximately 0.77% of the Discounted Principal Balance. Overcollateralization: OC equals 1.70% of the current Discounted Principal Balance. Subordination: Total subordination for the class A notes is 2.39%. Excess Spread: The receivables do not carry an interest rate or accrue late fees and Customers are required to be repaid at the end of the billing cycle. However, exces s spread is generated by discounting the pool balance at a rate of 2.50%. Reserve Account: Funds in the reserve account will be used to cure any Asset Deficiency resulting from the redemption of rewards by Customer as well as certain expenses of the Issuing Entity and interest on the Series 2022-1 notes. Early Amortization Events: The Brex 2022-1 transaction has a revolving period of approximately 23 months, during which no principal payments will be made on the notes unless an Early Amortization Event occurs. If an Early Amortization Event occurs, the revolving period will end, and the Early Amortization Period will begin. During an Early Amortization Period, no new receivables will be funded from the Series 2022-1 collections, and the notes will receive principal payment in sequential order. The performance triggers that will cause an Early Amortization Event are outlined below: ▪ the Three-Month Average Excess Spread Percentage is less than 3.00% ▪ the Three-Month Average Monthly Net Charge-Off Rate is greater than 1.25% ▪ the Three-Month Average Monthly Payment Rate is less than 80.00% ▪ an Asset Deficiency exists as of the last day of any Monthly Period and continues to exist on the Payment Date related to such Monthly Period For more detail on the Early Amortization Events and Trust Early Amortization Events, see the Transaction Structure section. + Geographic & Obligor Exposure Since the collateral is a charge card rather than a credit card, outstanding balances are due at the end of each month. As a result, the collateral pool may migrate over time and become concentrated in regard to geography and obligor. As of the Information Date, the largest two states were CA (46%) and NY (16%), and the ten largest obligors make up 8% of the Master Trust collateral. The transaction documents contain a state concentration limits to mitigate geographic concentration, which limit the highest state concentration to 60%. To mitigate obligor concentration risk the transaction includes a single obligor concentration limit of 3%. Additionally, since credit limits are based on cash balances, the obligors with the largest receivable balances typically have the largest cash balances. Credit limits are assigned up to $1 million. Limits over $1 million require additional approval. As of the Information Date, 18% of the total number of accounts in the Master Trust collateral pool had a credit limit over $1 million. KBRA developed stressed cash flow scenarios that assume the top obligors default. See Breakeven Chargeoff Multiple section of this report for further detail. If the Master Trust collateral pool composition exceeds the transaction’s excess concentration limits, the aggregate discounted principal balance from the largest states and obligors will be reduced from the eligible collateral balance until the amounts are equal to the limits. For more detail on the Excess Concentration Limits, see the Transaction Structure section. -/+ Brex Commercial Charge Card Master Trust Series 2022-1 7 March 30, 2022 Lack of Concentration Limits As the transaction is collateralized by charge card receivables, the Master Trust collateral pool generally turns over every month and may contain collateral with characteristics that are different from those as of the Information Date. Brex 2022-1 only includes geographic and maximum obligor size concentration limits during the revolving period. As the transaction does not feature other forms of concentration limits, the collateral pool is subject to credit drift over the term of the revolving period. This risk is mitigated by Brex’s underwriting and servicing policies. Brex typically requires a high cash coverage for its Customers at the time of underwriting in comparison to credit limits and will ACH debit its Customers’ bank accounts each month in the amount of the full card balances. As a result, historical payment rates for the Brex card have been high. In addition, the transaction benefits from multiple performance triggers that would end the revolving period and begin a full turbo payment to the notes if the collateral credit quality were to deteriorate by certain levels. - Financial Strength and Funding Sources Brex generates revenue from interchange income, which is earned from the payment network based on the GMV of Customers’ spending on their cards. If Customers’ spending on their cards is reduced, Brex’s revenue would decline. Brex has not achieved profitability and failure to maintain sufficient debt and equity financing and, ultimately, to achieve profitable operations could adversely affect its ability to perform its obligations. Brex provided KBRA with its audited financial statements for YE 2017 through 2020, as well as unaudited financials for 2021. See Financial Condition for further details. This risk is partially mitigated through the Company’s ability to access short term liquidity with two asset backed lending facilities backed by their charge card accounts. These facilities have staggered maturities, and total committed capacity: $377 million and uncommitted capacity of $127 million. Brex intends to use some or all of the proceeds from the sale of the Series 2022-1 Notes to repay outstanding amounts of the series 2021-A Loan. The Company has raised approximately $1.24 billion in equity since launching in 2017 and ended 2021 with approximately $990 million in total equity. - Servicer and Backup Servicer Brex, as the Servicer, is responsible for servicing and administering the receivables, collecting, and processing Customer payments and charging off uncollectible receivables. The Company will receive a 1.00% per annum servicing fee calculated on the aggregate outstanding receivables balance. See the Servicing and Collections section for further details. The balance on the Customer’s account is due once the monthly statement period has ended. Brex automatically collects any balances due directly from Customers’ linked bank accounts using ACH and does not rely on Customers to pay their balance manually. Customers can also prepay their balance at any time. Brex does not currently offer grace periods, and all statement balances must be paid in full on their due date. Servicing the portfolio through ACH reduces the risk of a servicing disruption in the event of a servicing transfer. Nelnet is the backup servicer for this transaction. The backup servicer will perform ce rtain backup servicing duties and act as successor servicer after a request to transition servicing duties. See the Backup Servicer section for further details. + Relationships with Emigrant Bank and Fifth Third Bank Brex does not have a bank charter and cannot directly issue charge cards. Brex has partnered with Emigrant Bank since 2018 to originate the charge card accounts pursuant to credit and origination policies jointly established by the Brex and Emigrant. In addition to the partnership with Emigrant, Brex has also entered into a similar agreement with Fifth Third Bank and will begin to originate accounts with Fifth Third Bank in Q2 2022. If Brex’s agreements with the Account Owners are terminated or otherwise disrupted, there is a risk that the Company would not be able to enter into agreements with another account owner in a timely manner without disruption to its business. KBRA believes that this risk is partially mitigated by agreements with two different banks. -/+ Brex Commercial Charge Card Master Trust Series 2022-1 8 March 30, 2022 Macroeconomic Factors As a result of COVID-19 related economic disruption many small businesses struggled throughout the pandemic. The challenges faced by small businesses manifested in a significant increase in delinquencies and charge-offs in small business ABS collateral, although transaction features in a number of securitizations resulted in substantial deleveraging and full repayment of ABS notes. Since mid-2020, the small business lending sector experienced positive credit performance owing to a number of factors including government stimulus, higher consumer spending, lower unemployment, easing of social distancing measures and increased economic activity. While Brex 2022-1 may include receivables made to businesses that were more resilient during the pandemic as these businesses were able to maintain sufficient revenue and cashflow to pass underwriting requirements and credit performance which has improved recently, the macroeconomic environment remains fluid due to supply chain issues, a tight labor market, inflationary pressures and changing consumer behaviors. These factors were considered in KBRA’s rating analysis, which assumed losses will normalize to higher levels over the term of the subject securitization.