OREANDA-NEWS. Fitch Ratings has assigned E-Carat 8 S.A., Compartment 8's class A and B notes expected ratings, as follows:

Class A, due August 2023: 'AAA(EXP)sf'; Outlook Stable
Class B, due August 2023: 'AA(EXP)sf'; Outlook Stable
Subordinated note: not rated

The expected ratings are based on Fitch's assessment of Opel Bank GmbH's (BBB-/Stable/F3) origination and servicing procedures, expectations of asset performance, available credit enhancement, and the transaction's legal structure.

Final ratings are contingent upon the receipt of final documents and legal opinions conforming to the information already received.

The proceeds from the issuance of the rated and subordinated notes will be applied to purchase loan receivables and related collateral, including security title to the financed vehicles.

The transaction is the eighth public securitisation of auto loan receivables originated by Opel Bank in Germany, previously known as GMAC Bank GmbH (GMACB). The transaction is static and the rated notes amortise sequentially. Following the recent rebrand, Opel Bank is still a wholly owned subsidiary of General Motors Company (GM) and continues to be managed by and consolidated under its former parent, General Motors Financial Company, Inc.

KEY RATING DRIVERS
Low Loss Base Case
Fitch determined a loss base case of 0.6%, in line with the E-CARAT 7 transaction. This is despite the E-CARAT 8 portfolio having a higher share of used car loans, which have historically performed worse than new car loans. Fitch took into account the improved loan performance. This is mainly attributed to the benign economic situation in Germany which is expected to continue in the foreseeable future.

Balloon Payments Add Risk
About 75% of the loans in the provisional pool include a balloon payment at contract maturity. Fitch considers balloon loans to be more risky than fully amortising loans as they may cause a payment shock to the borrower at the point when the balloon payment is due. The agency captured this additional risk by adjusting its default multiples.

Payment Interruption Risk Mitigated
The transaction has an amortising, pre-funded liquidity reserve available to protect against payment disruption. A non-amortising pre-funded commingling reserve is also available to support timely payments of the rated notes if the servicer becomes insolvent and collections are trapped in the servicer's account.

Outsourced Servicing Task
Opel Bank is the servicer of the transaction but servicing functions such as early collections, inbound and field service management are outsourced to Arvato AG, a subsidiary of Bertelsmann SE & Co KGaA. Should Opel Bank's rating be downgraded below 'BB+', a back-up servicer will be appointed to cover the remaining servicing tasks conducted by Opel Bank.

RATING SENSITIVITIES
Unexpected increases in the default rate and loss severity on defaulted loans could produce loss levels greater than Fitch's assumptions and could result in negative rating actions on the notes.

Expected impact upon the note rating of increased defaults (class A/B):
Current expected ratings: 'AAAsf'/'AAsf'
Increase base case defaults by 10%: 'AAAsf'/'AAsf'
Increase base case defaults by 25%: 'AA+sf'/'A+sf'
Increase base case defaults by 50%: 'AAsf'/'Asf'

Expected impact upon the note rating of reduced recoveries (class A/B):
Current expected ratings: 'AAAsf'/'AAsf'
Reduce base case recovery by 10%: 'AAAsf'/'AAsf'
Reduce base case recovery by 25%: 'AAAsf'/'AA-sf'
Reduce base case recovery by 50%: 'AAAsf'/'A+sf'

Expected impact upon the note rating of increased defaults and reduced recoveries (class A/B):
Current expected ratings: 'AAAsf'/'AAsf'
Increase default base case by 10%; reduce recovery base case by 10%: 'AAAsf'/'AA-sf'
Increase default base case by 25%; reduce recovery base case by 25%: 'AA+sf'/'A+sf'
Increase default base case by 50%; reduce recovery base case by 50%: 'A+sf'/'BBB+sf'

Key Rating Drivers and Rating Sensitivities are further described in the presale report, which is available at www.fitchratings.com or by clicking the link above.

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

DATA ADEQUACY
Fitch reviewed the results of a third party assessment conducted on the asset portfolio information, which indicated no adverse findings material to the rating analysis. Fitch believes the sample size and relevance of the tested fields suggest the originator provided an acceptable quality of data for assigning the expected ratings. Fitch also performed a file review during its last originator review in July 2014 to ensure it was comfortable with the quality of data.

SOURCES OF INFORMATION
The information below was used in the analysis.
-Loan-by-loan data provided by Opel Bank as at 31 March 2015
-Historical performance data provided by Opel Bank as at 31 March 2015
-Stratifications of the asset portfolio provided by Opel Bank as at 31 May 2015
-Investor reports provided by Opel Bank as at 31 May 2015

REPRESENTATIONS AND WARRANTIES
A comparison of the transaction's Representations, Warranties & Enforcement Mechanisms with those typical for the asset class is available by accessing the appendix that accompanies the initial presale report (see E-Carat S.A., Compartment 8 - Appendix), dated 01 July 2015 at www.fitchratings.com). In addition refer to the special report "Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions" dated 26 March 2015 available on the Fitch website.