OREANDA-NEWS. September 14, 2015. Fitch Ratings has affirmed FTA Santander Consumer Spain Auto 2013-1's class A notes at 'A+sf' with Stable Outlook.

The transaction is a securitisation of auto loans originated in Spain by Santander Consumer EFC SA, a wholly-owned and fully integrated subsidiary of Santander Consumer Finance (SCF, A-/Stable/F2) whose ultimate parent is Banco Santander S.A. (A-/Stable/F2).

KEY RATING DRIVERS
The affirmation is supported by the positive performance of the underlying collateral over the last 12 months. As of end-June 2015 cumulative defaults, defined as loans in excess of 12 months in arrears, represented a low 0.3% of the initial collateral amount, while recoveries on defaulted amounts reached 13%. However, Fitch has maintained its lifetime base case default and recovery assumptions at 7.7% and 38.8%, respectively, given that the time passed since closing (less than 24 months) is relatively short in the context of the long default definition. Credit enhancement for the class A notes has increased to 38.6% from 22.5% since closing in October 2013 due to deleveraging.

The trigger on the account bank, SCF, which is set at 'BBB+'/'F2', constrains the rating of the notes to the 'Asf' category, according to Fitch's counterparty criteria. Exposure to SCF is material as it holds the cash reserve fund, period collections and retained collections of up to 8% of the collateral balance due to the transaction's principal retention feature. Fitch further analysed the impact of a loss of reserve fund and retained collections, and concluded there is no excessive counterparty reliance.

Credit enhancement for the class A notes is provided by the subordination of an unrated loan B and a fully funded reserve fund, which represent 21.5% and 17.2% of outstanding class A notes, respectively. This strong level of protection supports the Stable Outlook on the notes.

RATING SENSITIVITIES
Fitch believes the class A notes' rating is able to absorb large variations to our base case credit assumptions. This is because the rating is capped at three notches above the account bank counterparty's trigger.

In testing the notes' sensitivities Fitch has found that an increase of defaults and a reduction of recoveries by 25% each had no impact on the notes' 'A+sf' ratings

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 pool and the transaction. 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.
-Transaction reporting provided by Santander de Titulizacion as at end-June 2015
-Transaction loan level data from the European Data Warehouse as of end-June 2015
-Servicer's procedures review as of end-September 2014

REPRESENTATIONS AND WARRANTIES
A comparison of the transaction's Representations, Warranties & Enforcement Mechanisms to those typical for the asset class is available by accessing the appendix that accompanies the initial new issue report (see FTA, Santander Consumer Spain Auto 2013-1 - Appendix, dated 10 December 2013 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.