OREANDA-NEWS. Fitch Ratings has affirmed PRIME 2006-1 Funding Limited Partnership's notes as follows:

Class A notes (ISIN: XS0278567994): paid in full
Class B notes (ISIN: XS0278569776): paid in full
Class C notes (ISIN: XS0278570519): paid in full
Class D notes (ISIN: XS0278571756): paid in full
EUR9.8m Class E notes (ISIN: XS0278572135): affirmed at 'Csf'; RE: revised to 40% from 0%

The transaction is a cash securitisation of subordinated loans to German medium-sized enterprises. The portfolio companies were selected by the originating banks HSH Nordbank AG (A-/Negative/F1), Landesbank Baden-Wuerttemberg (A+/Negative/F1+) and Haspa Beteiligungsgesellschaft fuer den Mittelstand mbH.

KEY RATING DRIVERS
Prime 2006-1 reached scheduled maturity in August 2013. The companies' subordinated loans that are securitised in the pool all became due shortly before the scheduled maturity date. Currently, only class E notes remain outstanding, with the other classes all repaid in full. Beyond the scheduled maturity date, two companies are still listed as constituents of the portfolio. The total current portfolio amount of the two loans was EUR10.6m as per the last investor report (August 2014).

Based on past payments of the non-performing portfolio companies Fitch expects the class E notes to be repaid by approximately 40% and has adjusted its Recovery Estimate (RE) on the class E notes to 40% from 0% accordingly.

Consequently, Fitch does not expect the class E notes to be fully repaid at legal final maturity in August 2015. This is reflected in the current rating of the class E notes.

RATING SENSITIVITES
After scheduled maturity, the transaction is primarily sensitive to recoveries from defaulted or restructured agreements (via loan restructuring agreements).

Fitch assigns RE to all notes rated 'CCCsf' or below. REs are forward-looking recovery estimates, taking into account Fitch's expectations for principal repayments on a distressed structured finance security.

Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring.

Fitch did not undertake a review of the information provided about the underlying asset pool ahead of the transaction's initial closing. The subsequent performance of the transaction over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information it had relied upon for its initial rating analysis was adequately reliable.

Overall Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.