Fitch Assigns Final Ratings to Flexi ABS Trust 2015-2
AUD100m Class A1 notes: 'F1+sf';
AUD17.1m Class B notes: 'AAsf'; Outlook Stable;
AUD12.85m Class C notes: 'Asf'; Outlook Stable;
AUD10m Class D notes: BBBsf'; Outlook Stable;
AUD5.7m Class E notes: BBsf'; Outlook Stable; and
AUD14.25m Class F notes: NRsf
The notes are issued by Perpetual Corporate Trust Limited in its capacity as trustee of Flexi ABS Trust 2015-2.
At the cut-off date, the total collateral pool consisted of 142,188 individual consumer loan contracts totalling AUD280.9m. The loan receivables are retail point-of-sale interest-free consumer finance receivables that finance a wide variety of products including solar equipment (43.1%); jewellery (17.9%); fitness equipment (4%); and a broad cross section of other products. Transactions issued by Certegy have portfolios that have a remaining term that is shorter than typical Australian ABS transactions; therefore we have amended back-loaded loss timing to ensure the pool, towards the tail, is at least larger than the balance of expected losses that are realised within our cashflow analysis.
KEY RATING DRIVERS
Diverse and Granular Portfolio: The portfolio comprises of receivables originated to a geographically diversified pool of Australian retail customers across many asset types. The average contract size is AUD1,976 while the weighted average (WA) remaining term stands at 22.5 months. The pool contains 54.2% homeowners and 30% repeat customers.
Strong Track Record: Delinquencies greater than 30 days on Certegy's retail portfolio have historically tracked below 3.0%.
Availability of Excess Spread: The transaction yields significant levels of excess spread which is used to support the rating of the Class D and E notes, while sufficient credit enhancement, provided by the subordination of more junior notes, exists for the Class A1, A2, B and C notes, to be rated independent of any soft credit support (excess spread).
Support Features Support Rating: A liquidity reserve, funded by proceeds from issuance, will ensure stable cash flows for all rated notes and trust expenses. A derivative reserve account will be established to set aside any voluntary prepayments made by borrowers, to ensure sufficient income is available to cover future swap payments.
No Residual Value Risk: All securitised loans are structured so that there is no exposure to residual value risk, with the borrower liable for such risks at all times.
RATING SENSITIVITIES
DUE DILIGENCE USAGE:
DATA ADEQUACY
Key Rating Drivers and Rating Sensitivities are further discussed in the corresponding new issue report entitled "Flexi ABS Trust 2015-2", published today. Included as an appendix to the report are a description of the representations, warranties, and enforcement mechanisms.
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