OREANDA-NEWS. Fitch Ratings has upgraded Free Mobility No 6 UG's class B notes while affirming the class A notes as follows:

EUR13.9m class A notes: affirmed at 'AAAsf'; Stable Outlook
EUR28.6m class B notes: upgraded to 'AAAsf' from 'AAsf'; Stable Outlook

Free Mobility is a securitisation of German auto loan receivables originated by FFS Bank GmbH (FFS Bank), which also acts as servicer. The securitised portfolio consists of secured, fixed-rate loans advanced to borrowers within Germany.

KEY RATING DRIVERS
Disruption Risk Minimised
A back-up servicer, Bankaktiengesellschaft (BAG, AA-/Stable/F1+) is in place, which reduces servicing disruption risk. In addition, a liquidity reserve is available to address any potential payment disruption risk. Interest rate risk is largely absent, as both assets and liabilities pay fixed rates of interest.

High Credit Enhancement (CE)
CE, which takes into account the reserve fund and the overcollateralisation provided by the subordinated loan, increased to 83.4% in December 2015 from 13.1% at closing in December 2012. The class B notes' CE increased to 46.6% in December 2015 from 7.4% at closing, leading to today's upgrade.

Robust Asset Performance
As of end-December 2015, the outstanding class A notes accounted for 3.2% of their initial balance. Loans in arrears have remained largely stable since closing. While 30+ days delinquencies (currently 3.9%) exceed levels usually seen in other German transactions, they are within Fitch's expectations. Recoveries are in line with the agency's base case assumption of 50%. Cumulative defaults (1.2%) are below our expectations (1.6%).

Stable Sector and Rating Outlook
Fitch expects consumer ABS asset performance to be stable/positive across Europe with decreasing arrears and prepayments increasing gradually. However, although counterparty pressure eases, significant concentration exists as the top five institutions are involved in 68% of existing European structured finance transactions as either SPV account bank or swap provider. Ninety five per cent of Fitch's Rating Outlooks across the region are Stable or Positive compared with 89% last year. This increase can mainly be explained by the improved credit performance of securitised assets.

Fitch has revised its lifetime default base for Free Mobility to 2% from 3% with all other assumptions remaining the same.

RATING SENSITIVITIES
Expected impact upon the note rating of increased defaults (class A/B):
Current ratings: 'AAAsf'/'AAAsf'
Increase base case defaults by 25%: 'AAAsf'/'AAAsf'

Expected impact upon the note rating of reduced recoveries (class A/B):
Current Ratings: 'AAAsf'/'AAAsf'
Reduce base case recovery by 25%: 'AAAsf'/'AAAsf'

Expected impact upon the note rating of increased defaults and reduced recoveries (class A/B):
Current Ratings: 'AAAsf'/'AAAsf'
Increase base case defaults and reduce base case recoveries by 25%: 'AAAsf'/'AAAsf'

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.

Prior to the transaction closing, Fitch conducted a review of a small targeted sample of the origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio.

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 FFS Bank GmbH as at end-December 2015