OREANDA-NEWS. S&P Global Ratings today assigned its preliminary ratings to CNH Equipment Trust 2016-C's $752.36 million asset-backed notes series 2016-C (see list).

The note issuance is an asset-backed securities transaction backed by equipment retail installment sales contracts.

The preliminary ratings are based on information as of Sept. 7, 2016. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.

The preliminary ratings reflect: The availability of approximately 7.90% and 6.07% credit support (based on stressed break-even cash flow scenarios) for the class A and B notes, respectively. The credit support provides coverage of more than 5x and 4x the lower bound of our expected net loss range of 1.50%-1.75% for the class A and B notes, respectively. The expectation that, under a moderate stress scenario of 2.0x our expected net loss level, the ratings on the class A and B notes will not decline by more than one or two rating categories, respectively, during the first year, all else being equal. Our expectation of the timely payment of periodic interest and principal by the final maturity date according to the transaction documents based on stressed cash flow modeling scenarios, using assumptions commensurate with the assigned preliminary ratings. The securitized equipment loan pool's collateral characteristics, taking into account the concentrations of agricultural equipment contracts and construction equipment contracts (87.29% and 12.71% of the pool balance, respectively). Structural features that offset the liquidity risk associated with the pool's annual pay contracts (60.90% of the pool balance, but with some diversification by calendar month of when payments on annual pay contracts are due), including a cash reserve account that is initially funded at 2.25% of the initial pool balance and steps down (subject to performance triggers) but only to a 1.15% floor, and a discounting methodology that allows principal cash flows to be used to pay timely interest if needed. CNH Industrial Capital America LLC's (CNH's) history of servicing 60 previous U. S. retail securitizations and management's lending experience through multiple cycles in the agricultural and construction equipment sectors. The transaction's legal structure.