OREANDA-NEWS. Fitch Ratings has affirmed Bilkreditt 3's EUR34.4m class A1 notes and NOK647.7m class A2 notes at 'AAAsf' with a Stable Outlook.

KEY RATING DRIVERS
The affirmation reflects the transaction's robust performance to date. As of end-July 2015, the transaction has paid down to 5.1% and 59.1% of their initial balance for class A1 and class A2 notes, respectively. Credit enhancement has increased to 58.1% from 18% at closing in November 2012.

Delinquencies remain stable and cumulative defaults have been lower than Fitch's expectations. The reserve fund has amortised down in line with our expectations to NOK124.1m (6% of the current note balance), and the target reserve amount will continue to be set at 6% of the current note balance, subject to a floor of NOK35.4m.

Based on defaults and collateral amortisation to date, Fitch has revised the transaction lifetime default base case to 2.25% from the original 3.5% at closing.

Fitch expects Norway's GDP growth to slow marginally, but despite an elevated level of household debt the economy is robust. Unemployment rises are therefore unlikely over the remaining term of the notes. Overall, auto loan performance is expected to remain in line with historical trends.

Interest rates on the assets are variable and determined from time-to-time by the servicer, without a direct link to NIBOR. Under the servicing agreement, the servicer commits to maintain a minimum margin of 3% over NIBOR. Fitch's asset analysis has incorporated and stressed this minimum margin in a number of scenarios.
RATING SENSITIVITIES

The ratings would not be sensitive even to an unexpected increase in the unemployment rate causing significantly higher default rates, due to substantial deleveraging to date.

The ratings would also be largely insensitive to significantly lower-than-expected recoveries from defaulted loans, e.g. in case of a severe downturn of the Norwegian used car market.

Expected impact upon the note rating of increased defaults and reduced recoveries:
Class A1:
Current Rating 'AAAsf'
Increase base case defaults by 25%: 'AAAsf'; reduce base case recoveries by 25%: 'AAAsf'

Class A2:
Current Rating: 'AAAsf'
Increase base case defaults by 25%: 'AAAsf'; reduce base case recoveries by 25%: 'AAAsf'

Class A1:
Current Rating 'AAAsf'
Increase base case defaults by 25%: and reduce base case recoveries by 25%: 'AAAsf'

Class A2:
Current Rating 'AAAsf'
Increase base case defaults by 25%: and reduce base case recoveries by 25%: 'AAAsf'

Initial Key Rating Drivers and Rating Sensitivity are further described in the New Issue report dated 28 November 2012 at www.fitchratings.com.

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.

SOURCES OF INFORMATION
The information below was used in the analysis.
-Investor reports and information provided by Santander Consumer Bank AS as at 28 August 2015

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 Bilkreditt 3 Limited - Appendix, dated 28 November 2012 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.