Fitch Affirms Two, Upgrades Two Classes of GE Equipment Small Ticket LLC Series 2014-1
OREANDA-NEWS. Fitch Ratings takes rating actions on GE Equipment Small Ticket L.L.C Series 2014-1 (GE EST 2014-1) as follows:
--Class A-3 affirmed at 'AAAsf' Outlook Stable;
--Class A-4 affirmed at 'AAAsf' Outlook Stable;
--Class B upgraded to 'AAAsf' from 'AAsf'; Outlook to Stable from Positive;
--Class C upgraded to 'AAsf' from 'Asf'; Outlook Positive.
KEY RATING DRIVERS
The rating affirmations are based on available credit enhancement and loss performance. The collateral pool continues to perform within Fitch's expectations. Based on the current structure and credit enhancement, the securities are able to withstand stress scenarios consistent with the original ratings and make full payments to investors in accordance with the terms of the documents.
The Positive Outlook designation for the class C notes reflects Fitch's expectation for loss coverage to continue improving as the transaction amortizes and credit enhancement levels continue to build. The Positive Outlook designation on the notes reflects Fitch's view that the notes will continue to perform well and may warrant a review for potential positive rating action in the next 12-18 months.
Effective as of March 1, 2016 Wells Fargo Bank, N.A. (Wells) is the master servicer for the GE EST 2013-1 and 2014-1 transactions. On October 13, 2015, Wells signed an agreement to purchase GE Capital's Vendor Finance platform. As part of the agreement, Wells acquired GE Capital's Vendor Finance servicing personnel that are responsible for servicing of the aforementioned transactions. As such, Fitch does not expect the servicing transfer to negatively impact the performance of the 2013-1 and 2014-1 transactions, as servicing and collection procedures are not expected to materially change.
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 and impact available loss coverage and multiples levels for the transaction. 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 to a 1.5x and 2.5x increase of Fitch's base case loss expectation. To date, the transaction has exhibited stable performance with losses within Fitch's initial expectations with rising loss coverage and multiple levels. As such, 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.
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