OREANDA-NEWS. S&P Global Ratings today affirmed its 'AAA (sf)' credit rating on Retail Automotive CP Germany 2013 UG (Haftungsbeschrankt)'s class A fixed-rate notes.

Today's affirmation follows our review of the transaction's performance since closing in July 2013 (see "Rating Assigned To Retail Automotive CP Germany 2013's Class A Auto ABS Notes," published on July 25, 2013).

Late stage delinquencies (more than 90 days past due) have been low and declining since 2015. Realized gross losses also compare favorably with our base-case expectations. As of June 2016, the late stage delinquency rate was 0.01%, while the cumulative gross loss rate since the transaction's amortization begun was 0.66%. The cumulative recovery rate on losses since closing was 56.3% in June 2016. The pool has experienced moderate average prepayments since the beginning of the transaction's amortization, compared with the original amortization schedule.

The pool has a weighted-average effective yield of 5.40% as of June 2016, which is relatively unchanged from the closing level of 5.63%, notwithstanding the 12-month revolving period, defaults, and prepayments.

The transaction features a split pre-enforcement priority of payments. Under this, interest on the class A and B notes are paid sequentially, after the available distribution amount has first been used to pay senior expenses including servicing fees. Principal amortization of the class A and B notes is also sequential, with payments due on the class B notes subordinated to those on the class A notes.

As a consequence of the notes' amortization, available credit enhancement for the class A notes has increased to 31.5% from 8.4% at closing. The pool factor in June was about 25.0%, while the class A note factor was about 18.0%. Operational, counterparty, legal, payment structure, and cash flow risks continue to be adequately mitigated, in our view.

Taking all of the above-mentioned factors into consideration, we have affirmed our 'AAA (sf)' rating on the class A notes.

Retail Automotive CP Germany 2013's portfolio comprises fixed-rate straight amortizing loan receivables with a small portion (about 20% as of June 2016) of fixed-rate balloon loan receivables. The loans were originated by CreditPlus Bank mainly to finance cars, with a small portion to finance motor bikes, scooters, and caravans.