OREANDA-NEWS. Fitch Ratings has affirmed Locat SV S.r.l.as follows:

EUR90m Class A1 (IT0005053274): affirmed at 'AA+sf'; Outlook Stable
EUR400m Class A2 (IT0005053266): affirmed at 'AA+sf'; Outlook Stable
EUR225m Class A3 (IT0005053274): affirmed at 'AA+sf'; Outlook Stable

The transaction is a revolving securitisation of receivables arising from a first portfolio of performing lease contracts entered into between Unicredit Leasing (UCL) and Italian SMEs. A second portfolio of receivables originated by Fineco Leasing (FEL), another former subsidiary of Unicredit S.p.A. (BBB+/Negative/F2), which merged with UCL on 1 April 2014, was purchased before end-2014 through a partly paid notes mechanism.

KEY RATING DRIVERS
The affirmations reflect the stable performance of the portfolio, the successful inclusion of the FEL portfolio and an increase in credit enhancement (CE), as expected, to 46.1% from 45% over the past one year. This is due to its EUR22.8m reserve fund being fully funded. However, the rating is capped at 'AA+sf' by Italy's sovereign rating.

The portfolio has continued to purchase subsequent portfolios on a monthly basis during the revolving period, which ends in September 2016. The portfolio has three sub-pools of leased assets, comprising moto vehicle, equipment and real estate, with a current balance of EUR369m, EUR507m and EUR372m respectively. The default rate for each pool is low at 0.28%, 0.46% and 0.34% and overall cumulative defaults are 0.84% of the performing portfolio as of end-September 2015. There are 17.3% of fixed-rate receivables and all are hedged through swap. The current portfolio remains granular, with over 30,000 leases assets.

RATING SENSITIVITIES
Increasing the default rate by 1.25x or reducing the recovery rate by 0.75x to all assets in the portfolio would not have any impact on the ratings. A change in the rating of Italy may lead to corresponding 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. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring.

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 European Data Warehouse as at 1 June 2015
-Loan internal ratings provided by Unicredit Leasing as at 1 June 2015
-Bank book observed default rates provided by Unicredit Leasing as at 31 December 2013
-Transaction reporting provided by UniCredit Leasing at 7 September 2015.