Fitch Ratings has assigned the following ratings and Outlooks to the --
Key Rating Drivers
Credit Quality Obligors: Although substantially all of the collateral pool consists of obligors that are not rated by any nationally recognized statistical rating organization (NRSRO), EFM's portfolio has experienced minimal delinquencies and net losses. In its analysis, Fitch conservatively assumed a 'B' rating for all obligors.
Strong Portfolio Diversification: Obligor and industry concentrations have decreased relative to the EFF 2013-2 transaction. The single most concentrated obligor represents 0.64 percent of the pool, compared with 1.21 percent in 2013-2. Closed- end leases have decreased to 3.9 percent versus 5.4 percent in 2013- 2. Vehicle type concentrations are consistent with 2013-2.
Minimal Residual Risk: Approximately 96 percent of the 2014-1 leases are of the open-end type, meaning the lessees bear the residual risk. The remaining approximately 3.9 percent are closed- end leases, whereby EFM bears the residual risk. Therefore, the trust has limited exposure to closed-end residual risk and is only exposed to wholesale market risk in the event of an obligor default on the open-end portion of the portfolio.
Sufficient Credit Enhancement: Initial hard credit enhancement (CE; 8.90 percent) has decreased slightly from the 2013-2 transaction (9 percent), and excess spread has also declined. Total proposed CE is sufficient to support Fitch's stressed default and loss assumptions, consistent with the expected ratings of 'F1+sf/ AAAsf'.
Low Delinquency and Loss History: EFM's historical managed portfolio and prior transaction delinquency and loss experience is low, even during periods marked by elevated levels in other consumer and commercial asset classes due to a weak economy.
Quality Origination, Underwriting and Servicing Platform: EFM has demonstrated adequate capabilities as originator, underwriter and servicer, as evidenced by historical delinquency and loss performance of securitized trusts and the managed portfolio.
Unanticipated increases in the frequency of defaults could produce default levels higher than the projected base case default proxy and impact available default coverage and multiples levels. Lower default 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 changes in obligor credit profiles and recovery rates associated with the high concentration of truck collateral in the pool. Further details can be found in the presale report.
Key Rating Drivers and Rating Sensitivities are further detailed in the accompanying presale report, available at 'fitchratings.com' or by clicking on the above link.
Fitch's analysis of the Representations and Warranties (R&W) of this transaction can be found in
Additional information is available at fitchratings.com.
--'Global Structured Finance Rating Criteria' (
--'Global Rating Criteria for Corporate CDOs' (
--'Criteria for Rating US Auto Lease ABS' (
Global Structured Finance Rating Criteria
Global Rating Criteria for Corporate CDOs
Criteria for Rating U.S. Auto Lease ABS
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Fitch Ratings has assigned the following ratings and Outlooks to the