Fitch Assigns FCT Ginkgo Compartment Personal Loans 2015-1 Final Ratings
EUR 466.5m Class A: 'AAAsf'; Outlook Stable
EUR 81.0m Class B: 'AAsf'; Outlook Stable
EUR 54.7m Class C: 'Asf'; Outlook Stable
EUR 147.8m Class D: NR
The notes are backed by a pool of French unsecured consumer loans originated by CA Consumer Finance (CACF; A/Stable/F1). The securitised portfolio consists of general-purpose personal loans and debt consolidation loans advanced to individuals. All the loans bear a fixed interest rate and are amortising with constant monthly instalments
KEY RATING DRIVERS
Underlying Receivables Credit Risk
Fitch analysed obligor credit risk by forming base-case default expectations (10.3%) and recovery assumptions (42.0%), stressing these assumptions according to the rating of each note. The agency reviewed separate default and recovery data, and assigned distinct base case default and recovery assumptions for personal loans and debt consolidation loans.
Revolving Period Risk Mitigated
The transaction has a maximum 32-month revolving period. The early amortisation triggers, along with eligibility criteria and available credit enhancement, adequately mitigate the risk added by the revolving period. Fitch has analysed potential pool mix shifts during this period and modelled a worst-case portfolio.
Servicing Continuity Risk
CACF is the servicer. No back-up servicer was appointed at closing. However, servicing continuity risks are mitigated by, among other things, monthly transfer of borrowers' details, a commingling reserve and a reserve fund to cover liquidity.
Asset Outlook
Fitch has a stable outlook for French consumer ABS assets. Although the agency forecasts French economic activity to remain weak over the next two years, characterised by high unemployment, Fitch believes defaults are likely to remain within expectations, as these already incorporate our short-term macroeconomic expectations.
RATING SENSITIVITIES
Fitch tested the rating sensitivity of the notes to various scenarios, including an increase in the base case default rate and/or a decrease in the base case recovery rate for the portfolio. The model-implied sensitivities indicate that an increase in the base case default rate by 50% together with a decrease in the base case recovery rate by 50% may result in a five-notch downgrade of the class A notes, to 'Asf' from 'AAAsf', a six-notch downgrade of the class B notes, to 'BBBsf' from 'AAsf' and a five-notch downgrade of the class C notes to 'BB+sf' from 'Asf'.
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