OREANDA-NEWS. Fitch Ratings has updated and republished the presale report for Volkswagen Finance (China)'s (VWFC) Driver China two Trust (Driver China).

The agency has updated the report to reflect that references to Fitch were removed from the transaction documents. The most significant change is the removal of rating thresholds designed to maintain the rating of the account bank at a minimum level commensurate with a 'AAsf' rating of the most senior notes. The references to Fitch rating thresholds were also removed from the definition of permitted investments.

Fitch has received additional documentation from VWFC that confirms that it intends to take actions consistent with Fitch's criteria. Fitch understands that VWFC is legally obligated to take such actions. However, the documentation from VWFC is weaker than having counterparty remedial provisions consistent with criteria embedded in the transaction documents. While VWFC is legally obligated to maintain the bank account with an appropriately rated counterparty, the trust company could choose to not follow the instruction to open accounts with the replacement account bank when the bank's rating falls below a level commensurate with a 'AAsf' note rating. However, the trust company is charged with acting in the interests of noteholders and there is no reason to believe that the trust company would not follow such an instruction.

Given the credit quality of the account bank would be preserved in this scenario, Fitch believes the trust company would likely view the replacement to be in the interests of noteholders. Fitch therefore believes this arrangement is substantively consistent with the substance of its criteria.

The originator will make reasonable effort to procure the issuer to make permitted investments, if any, with a rating of at least 'A-' and 'F2'.

The changes do not affect the expected ratings.