News Column

Fitch to Rate Porsche Financial Auto Securitization Trust 2014-1; Issues Presale

May 12, 2014

NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Porsche Financial Auto Securitization Trust 2014-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748252

Fitch Ratings expects to assign the following ratings and Rating Outlooks to the notes issued by Porsche Financial Auto Securitization Trust 2014-1 (PFAST 2014-1):

--$144,000,000 class A-1 notes 'F1+sf';

--$138,000,000 class A-2 notes 'AAAsf'; Outlook Stable;

--$138,000,000 class A-3 notes 'AAAsf'; Outlook Stable;

--$68,300,000 class A-4 notes 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

Strong Collateral Quality: PFAST 2014-1 has strong credit quality with a weighted average (WA) FICO score of 781, 64.3% new vehicles and WA seasoning of 16.7 months. Porsche vehicles total 88%, and 2014-1 includes Bentley (10%) and Lamborghini (2%) vehicles, the first time these brands are included in a PFAST pool.

Adequate Credit Enhancement: PFAST 2014-1 is a sequential-pay structure. Initial hard credit enhancement (CE) totals 2.75% (2.50% overcollateralization [OC] and 0.25% reserve [both of the initial adjusted pool balance]), down versus 2011-1. Annual excess spread totals 2.73%. Under Fitch's analysis, the structure is able to support stressed losses commensurate with the expected ratings.

Stable Portfolio/Securitization Performance: PFS' portfolio and securitization is stable with low delinquencies and losses over the past three years. Performance has been supported by the improving U.S. economic recovery and stable used vehicle values.

Consistent Origination/Underwriting/Servicing: Fitch deems PFS an adequate originator, underwriter and servicer to service 2014-1, as evidenced by its historical portfolio and securitization delinquency and loss experience and securitization performance.

Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of PFS would not impair the timeliness of payments on the securities.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. In turn, it could result in potentially adverse rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to all classes of PFAST 2014-1 to increased losses over the life of the transaction. Fitch's analysis found that the notes display some sensitivity to increased defaults and losses. In fact, they could lead to potential downgrades of up to one category under Fitch's moderate (1.5x base case loss) scenario. The notes could experience downgrades of up to two rating categories under Fitch's severe (2.5x base case loss) scenario.

Key Rating Drivers and Rating Sensitivities are further described in Fitch's presale report, available at 'www.fitchratings.com' or by clicking on the above link.

Fitch's analysis of the Representation and Warranties (R&W) of this transaction can be found in Porsche Financial Auto Securitization Trust 2014-1--Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in Fitch's April 17, 2012 special report, 'Representations, Warranties, and Enforcement Mechanisms in the Global Structured Finance Transactions'.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 2013);

--'Rating Criteria for U.S. Auto Loan ABS' (April 2014);

--'Structured Finance Tranche Thickness Metrics' (July 2011);

--'Porsche Financial Auto Securitization Trust 2014-1 -- Appendix' (April 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Rating Criteria for U.S. Auto Loan ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=738718

Structured Finance Tranche Thickness Metrics

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646951

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=829634

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Joyce Fargas, +1 212-908-1824

Director

Fitch Ratings, Inc., 33 Whitehall Street, New York, NY 10004

or

Secondary Analyst

Melvin Zhou, +1 212-908-1503

Director

or

Committee Chairperson

Du Trieu, +1 312-368-2091

Senior Director

or

Media Relations:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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