Fitch Affirms and Upgrades Huntington Technology Funding Trust 2014-A
-- Class A-3 affirmed at 'AAAsf Outlook Stable;
-- Class B upgraded to 'AAsf' from 'Asf'; Outlook revised to Stable from Positive;
-- Class C affirmed at 'BBBsf' Outlook Positive.
KEY RATING DRIVERS
Fitch reviewed Huntington Technology Funding Trust 2014-A, formerly known as Macquarie Equipment Funding Trust 2014-A. Class A-3 and C notes were affirmed, reflecting the credit enhancement (CE) levels available to the classes which provide for net loss coverage levels commensurate with the ratings. The upgrade of class B to 'AAsf' reflects the growth in CE for the class. The Stable Outlooks on class A and B notes reflect the expectation of performance for the remaining life of the transaction. The Positive Outlook on class C reflects the possibility of an upgrade over the next 12 to 18 months.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults, or decreases in recovery rates, could produce loss levels higher than initially expected and could result in potential rating actions on the notes. In its initial review, Fitch evaluated the sensitivity of ratings assigned to unrated obligors to increased default levels. The transaction did show sensitivity to higher default rates, which Fitch stressed by assuming all unrated obligors carry a 'CCC' Issuer Default Rating. As a result of increased CE, the transaction currently shows minimal sensitivity to the same stress. However, a material increase in obligor concentrations may impact future sensitivities for this transaction. Initial Key Rating Drivers and Rating Sensitivities are further described in the new issue report published Aug. 13, 2014 available at www. fitchratings. com.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch's analysis of the Representations and Warranties (R&W) of this transaction can be found in 'Macquarie Equipment Funding Trust 2014-A - Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated May 2016.
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