Fitch Affirms Kubota Credit Owner Trust 2015-1
OREANDA-NEWS. Fitch Ratings has affirmed all classes of Kubota Credit Owner Trust 2015-1 at their current ratings. A full list of ratings follows at the end of this release.
KEY RATING DRIVERS
The affirmation of the class A notes reflects loss coverage levels consistent with the 'AAAsf' ratings. The Stable Outlook reflects Fitch's expectation for loss coverage and credit enhancement to continue to improve as the transaction amortizes. As of the November 2015 reporting period, cumulative net losses totaled 13 bps for 2015-1. Loss performance is forecasting below Fitch's initial base case loss proxy.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxy, which would impact available loss coverage. Lower loss coverage could impact ratings and rating outlooks, depending on the extent of the decline in coverage. In Fitch's initial review of the transaction the notes were found to have limited sensitivity, 1.5x and 2.5x higher than Fitch's base case loss expectation. Initial key rating drivers and rating sensitivities are further explained in the new issue report published Jan. 15, 2015.
To date, the transaction has exhibited strong performance with losses within Fitch's initial expectations with rising loss coverage and multiple levels. As such, continued strong performance for the transaction would most likely result in continued stable ratings. Conversely, a material deterioration in performance would have to occur within the asset pool to have potential negative impact on the outstanding ratings.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch's analysis of the Representations and Warranties (R&W) for Kubota Credit Owner Trust 2015-1 can be found in 'Kubota Credit Owner Trust 2015-1 - Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated June 12, 2015.
Fitch has affirmed the following ratings:
Kubota Credit Owner Trust 2015-1:
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable.
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