OREANDA-NEWS. June 30, 2015. Fitch Ratings affirms the ratings of La Hipotecaria's El Salvadorian cross-border transactions. A full list of rating actions follows at the end of this ratings action commentary.

KEY RATING DRIVERS
-- Low Level of Delinquencies
During the last 12 months, delinquencies within the underlying portfolio have performed in line with Fitch's expectations. Such low delinquency levels can be partly explained by the fact that the vast majority of the securitized loans benefit from a direct deduction payment mechanism, which helps mitigate willingness to pay risk. Cumulative +180-day delinquencies represent 0.49% of the original pool balance.

-- Increasing Credit Enhancement (CE)
CE to the series A senior notes has built slowly during the last year due to the sequential nature of the transaction structure. As of April 2015, it stood at 19.13%, up from 16% at transaction closing.

-- Affirmation of El Salvador's Sovereign Ratings
Fitch rates El Salvador's Issuer Default Ratings (IDRs) 'BB-', Outlook Negative and its country ceiling (CC) 'BB+' (the two notch difference is partially explained by El Salvador's official dollarization regime). As a result of the macroeconomic environment, Fitch applies higher multiples to the underlying portfolio's expected frequency of foreclosure (FOF) to ensure that the structure can withstand significant periods of stress. The rating assigned to the series A notes is capped by El Salvador's CC.

-- Credit Quality of Guaranty Provider
La Hipotecaria El Salvadorian Mortgage Trust 2013-1 certificates benefit from a payment guarantee by Overseas Private Investment Corporation (OPIC) in the event funds are insufficient to cover the monthly interest and final principal payment of the notes. OPIC is backed by the full faith and credit of the United States of America (U.S.; rated 'AAA', Outlook Stable by Fitch).

RATING SENSITIVITIES
The rating of series A is sensitive to changes in the credit quality of El Salvador. A downgrade of El Salvador's ratings, specifically its CC, would lead to a downgrade on the notes. In addition, severe increases in FOF and prepayments as well as reductions in recovery rates could lead to a downgrade of the notes.

The rating of series 2013-1 is sensitive to changes in the credit quality of the U.S. sovereign as OPIC is an agency of the U.S.

DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action

TRANSACTION SUMMARY
The \\$37.8 million series A senior notes are backed by residential mortgages made to lower-middle-income borrowers in El Salvador by La Hipotecaria. In addition, the Eleventh Mortgage Trust issued \\$5.4 million in series B notes and \\$1.8 million in series C notes, which have not been rated.

Approximately \\$33.75 million of the \\$37.8 million series A senior notes have been transferred to a U.S. grantor trust (La Hipotecaria El Salvadorian Mortgage Trust 2013-1). The U.S. trust has issued \\$33.75 million in 2013-1 certificates, which are pass-through certificates. The 2013-1 certificates benefit from a guaranty by OPIC.

The series 2013-1 certificates are a pass-through of 89% of the series A senior notes and benefit from a financial guaranty by OPIC guaranteeing timely payment of interest and ultimate payment of principal on the certificates.

Fitch has affirmed the following ratings:

La Hipotecaria Eleventh Mortgage-Backed Notes Trust
--\\$37.8 million series A senior notes at 'BB+sf', Outlook Negative.

La Hipotecaria El Salvadorian Mortgage Trust 2013-1
--\\$33.75 million series 2013-1 certificates at 'AAAsf', Outlook Stable.