Fitch Upgrades 3 classes of GM Financial Automobile Leasing Trust 2014-2
OREANDA-NEWS. Fitch Ratings has taken the following rating actions on GM Financial Automobile Leasing Trusts 2014-2:
--Class A-3 notes affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 notes affirmed at 'AAAsf'; Outlook Stable;
--Class B notes upgraded to 'AAAsf' from 'AAsf'; Outlook Stable;
--Class C notes upgraded to 'AAsf' from 'Asf'; Outlook revision to Positive from Stable;
--Class D notes upgraded to 'Asf' from 'BBBsf'; Outlook revision to Positive from Stable.
KEY RATING DRIVERS
The affirmations of the class A notes and upgrades to the class B, C and D notes reflect increased loss coverage levels since close. Hard credit enhancement (CE) has grown for all classes since close. Credit and residual losses have been within Fitch's initial expectations to date. The Stable Outlooks reflect Fitch's expectation that the notes will remain sufficiently enhanced to cover stressed loss levels consistent with their current rating levels. Further, the Outlook revision to Positive for the class C and D notes reflects the possibility for positive rating actions in the next 12 to 24 months.
Fitch will continue to monitor economic conditions and their impact as well as trust level performance variables and update the ratings accordingly.
RATING SENSITIVITIES
Unanticipated decreases in the value of returned vehicles and/or increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. This would likely result in declines of CE and loss coverage levels available to the notes.
Fitch conducted sensitivity analyses at the time of initial rating by increasing the transaction's initial base case RV and credit loss assumptions and examining the rating implications on all classes of issued notes. The increases to the base case losses are applied such that they represent moderate (1.5x) and severe (2.5x) stresses, and are intended to provide an indication of the rating sensitivity of notes to unexpected deterioration of a trust's performance.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
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