Fitch Ratings expects to assign the following ratings and Rating Outlooks to the notes issued by
KEY RATING DRIVERS
Strong Collateral Quality: PFAST 2014-1 has strong credit quality with a weighted average (
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.
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
Additional information is available at www.fitchratings.com.
--'Global Structured Finance Rating Criteria' (
--'Rating Criteria for U.S. Auto Loan ABS' (
--'Structured Finance Tranche Thickness Metrics' (
--'Porsche Financial Auto Securitization Trust 2014-1 -- Appendix' (
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Auto Loan ABS
Structured Finance Tranche Thickness Metrics
Source: Fitch Ratings
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