OREANDA-NEWS. Fitch Ratings has assigned South African Securitisation Programme (RF) Limited's (SASP) Series 1 class A20 and A21 notes expected National Long-term ratings, as follows:

ZAR168m Class A20 notes: 'AAA(zaf)(EXP)'; Outlook Stable
ZAR164m Class A21 notes: 'AAA(zaf)(EXP)'; Outlook Stable

The new notes will be issued to refinance two maturing notes.

Fitch expects to affirm the outstanding notes' National Long-term ratings when it assigns final ratings to the new notes. .

KEY RATING DRIVERS
Obligor Default Risk Paramount
The transaction securitises a granular pool of equipment leases granted to South African SME and other obligors. The key risk factor in the analysis was the obligor default risk. Fitch assigned a base case default probability equivalent to the 'B+' international-scale rating to each obligor. Given the nature of the leased products and their limited liquidation value, the main rating driver is the expected default rate, whereas recoveries carry a smaller weight.

Adequate Servicing Capability
Sasfin is the appointed servicer at closing. The servicer is allowed to delegate collections to third parties, although delegation is limited to 10% of the portfolio, unless the party has been reviewed by Fitch. Fitch deems Sasfin's ability to service the portfolio adequate, given its extensive experience in the equipment leasing sector.

Triggers Protect Portfolio Composition
The evergreen revolving period will end on the occurrence of an early-amortisation event. Eligibility and concentration criteria, combined with stop-purchase and stop-issuance triggers, provide protection against the deterioration of the portfolio composition.

Good Past Performance
Series 1 was established in its current form in 2007. Fitch has since monitored the performance, which has consistently been in line with the agency's expectations. As of end-May 2015, the 12-month annualised average default and loss rates were 1.1% and 1.2%, respectively.

Stable Outlook Despite Sovereign
The asset outlook for South African equipment leases remains stable. Lease delinquency levels continue to be low. Fitch expects some deterioration compared with the most recent historical performance, due to the overall slowdown of the South African economy. Negative rating action is unlikely, as rated transactions generally benefit from sound asset yields supporting a good level of excess spread. Additionally, Fitch stressed potential performance deterioration in its analysis.

RATING SENSITIVITIES
Rating sensitivity to increased default probabilities (class A / B / C)
Current ratings: 'AAA(zaf)' / 'A(zaf)' / 'BBB+(zaf)'
Increase default probability by 1.25x: 'AA-(zaf)' / 'A-(zaf)' / 'BBB(zaf)'
Increase default probability by 1.5x: 'A(zaf)' / 'BBB-(zaf)' / 'BB+(zaf)'

Rating sensitivity to reduced recovery rates (class A / B / C)
Current ratings: 'AAA(zaf)' / 'A(zaf)' / 'BBB+(zaf)'
Reduce recovery rates by 0.75x: 'AAA(zaf)' / 'A(zaf)' / 'BBB+(zaf)'
Reduce recovery rates by 0.5x: 'AAA(zaf)' / 'A(zaf)' / 'BBB+(zaf)'

Rating sensitivity to increased default probability and correlation, and reduced recovery rate (class A / B / C)
Current ratings: 'AAA(zaf)' / 'A(zaf)' / 'BBB+(zaf)'
Increase default probability by 1.25x, reduce recovery rates by 0.75x, and multiply country correlation by 2x: 'AA-(zaf)' / 'BBB+(zaf)' / 'BBB-(zaf)'

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

Fitch conducted a review of a small targeted sample of Sasfin's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio.

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