Fitch Affirms LHL Trust 2000-1 Senior BIs at 'AAAsf'
JPY1.35bn* senior BIs affirmed at 'AAAsf'; Outlook Stable
*as of 16 September 2015
The transaction is a securitisation of residential mortgage loans originated by Sumitomo Mitsui Trust Loan & Finance Co., Ltd. (formerly, Life Housing Loan, Ltd.).
KEY RATING DRIVERS
The affirmation reflects Fitch's view that the available credit enhancement (CE) level is sufficient to support the current rating.
The CE level has more than quadrupled since closing in April 2000 through sequential payment, and Fitch considers the senior BIs to be sufficiently protected against performance deterioration. Only one loan was delinquent as of end-August 2015.
The default performance of the underlying pool has been stable and the default model was not run for this rating action.
RATING SENSITIVITIES
An unexpected material increase in delinquencies, defaults and loss severities from defaulted loans in the underlying pool may lead to negative rating action. However, given the current CE level, the chance of downgrade is remote. For instance, the rated BIs can withstand, with the current CE level, a 60% default rate with 20% recovery rate in the underlying pool.
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 underlying 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 underlying pool information or conducted a review of loan origination files as part of its ongoing monitoring.
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