OREANDA-NEWS. Fitch Ratings has assigned ratings to SMART O Warehouse Trust's automotive and equipment lease-backed floating-rate notes. The issuance consists of notes backed by automotive and equipment lease receivables originated by Macquarie Leasing Pty Limited (Macquarie Leasing). The ratings are as follows:

AUD500.00m Class A notes: 'AAAsf'; Outlook Stable; and
AUD102.77m Class B notes: Not Rated

The notes were issued by Perpetual Trustee Company Limited in its capacity as trustee of SMART O Warehouse Trust. The latter is a legally distinct trust established pursuant to a master trust and security trust deed.

At 31 January 2016, the total collateral pool consisted of 6,649 lease receivables totaling AUD202.6m with an average size of AUD30,465. The pool is made up of passenger, light commercial vehicle and equipment receivables from Australian residents. The pool is geographically diverse and consists of amortising principal and interest leases, many with balloons of varying amounts payable at maturity.

KEY RATING DRIVERS
This SMART warehouse will include novated leases, non-novated leases (cars), trucks, as well as consumer and equipment receivables. Historical gross losses by quarterly vintage on novated leases (cars) range from 0.3%-1.5%, non-novated leases (cars) 1.0%-3.2%, trucks 0.5%-5.0%, equipment 0.2%-5.0% and consumer 0.8%-5.0%. Delinquencies more than 30 days have traditionally tracked below 1% for the Macquarie Leasing book.

RATING SENSITIVITIES
Any significant increase in defaults, losses or delinquencies and decreases in recovery rates away from base case assumptions may result in negative rating action.

DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.

DATA ADEQUACY
Fitch conducted a file review of 15 sample loan files focusing on the underwriting procedures conducted by Macquarie Leasing Pty Limited compared to its credit policy at the time of underwriting. Fitch has checked the consistency and plausibility of the information and no material discrepancies were noted that would impact Fitch's rating analysis.