OREANDA-NEWS. Fitch Ratings has upgraded 2014 Popolare Bari SME as follows:

EUR89.8m Class A2a (IT0005042681): affirmed at 'AA+sf'; Outlook Stable
EUR11.3m Class A2b (IT0005042699): affirmed at 'AA+sf'; Outlook Stable
EUR35m Class B (IT0005042707): upgraded to 'AAsf' from 'A+sf'; Outlook Stable

The transaction is a static cash flow SME CLO originated by Banca Popolare di Bari S.c.p.a. (BPB) and BPB's subsidiary, Cassa di Risparmio di Orvieto S.p.A. (CRO).

KEY RATING DRIVERS
The upgraded reflects an increase in credit enhancement (CE) for the class B notes to 50.6% from 35.6% at closing in August 2014. This is due to EUR50m class A1 notes being fully redeemed and a principal payment of EUR34m on the class A2 notes. This has led to a reduction in the outstanding class A2 notes as a share of the original class A2 note balance to 74.8% from 100%. The CE on the class A2 notes also increased to 64% from 47% during the same period; however, the rating is capped at 'AA+sf' by Italy;s sovereign rating.

The portfolio amortised rapidly, taking the current underlying asset balance as a share of the original portfolio balance to 78.1% from 100% one year after the deal closed. Current defaults are only 0.22% of the performing portfolio and the defaults are slow to register given the default definition of delinquencies for over 15 months. Delinquencies over 90 days increased to 3.9% and delinquencies over 180 days increased to 2.6%, from 0% at closing. The current portfolio is still granular, with the top obligor and top 10 obligors accounting for 1.62% and 8.03% of the total portfolio, respectively.

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. However, a change in the rating of Italy might lead to a rating action, as the transaction's current ratings are capped by the Italian sovereign rating.

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.

Prior to the transaction closing, 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.

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 Banca Popolare di Bari Scap as at 31 May 2015
-Transaction reporting provided by Securitisation Services as at 30 June 2015.