OREANDA-NEWS. Fitch Ratings has affirmed UBI Finance 3 S.r.l.'s class A notes (ISIN IT000467586) at 'A+sf' with a Stable Outlook

UBI Finance 3 S.r.l. is a securitisation of loans granted to Italian small and medium-sized businesses. The issuer is a special purpose vehicle incorporated in accordance with the Italian Law pursuant to Article 2, paragraph 3 of Law no. 130 of 30 April 1999.

KEY RATING DRIVERS
The affirmation reflects the increase in credit enhancement to 77.2% from 63.3% at the last review. This is due to a principal payment of EUR255.5m on the class A notes, which equals a reduction of the note factor to 14.2% from 28.0%.

The portfolio performance has slightly deteriorated since our last review. The portfolio factor has decreased to 50% from 58.5%. Current defaults have increased to EUR205.9m from EUR179.2m, which makes up 14.9% of the current portfolio. Delinquencies over 90 days have remained at 0.5%. The current portfolio is still granular, with the top obligor and top 10 obligors approximately 1.08% and 5.87% of the total portfolio, respectively.

The class A notes' rating is constrained by the transaction's definition of 'eligible investments', which enables cash proceeds in the accounts to be reinvested into assets rated up to 'BBB+' and 'F2', if maturing within 30 days. In accordance with Fitch's 'Counterparty Criteria for Structured Finance and Covered Bonds', dated 14 May 2014, this implies a ratings cap of 'A+sf' for the class A notes.

RATING SENSITIVITIES
Applying a 1.25x default rate multiplier or a 0.75x recovery rate multiplier to all assets in the portfolio would not result in any rating action on the rated notes

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

DATA ADEQUACY
Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that were material to this analysis.

Fitch did not undertake a review of the information provided about the underlying asset pools ahead of the transaction's initial closing. The subsequent performance of the transactions over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable.

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

SOURCES OF INFORMATION
The information below was used in the analysis:
-Loan-by-loan data provided by European Data Warehouse as at 30 March 2015
-Transaction reporting provided by UBI BANCA as at 27 April 2015