News Column

Fitch Affirms GE EMT 2011-1 and Upgrades and Affirms GE EMT 2012-1

June 10, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has taken the following rating actions on GE Equipment Midticket LLC (GE EMT), Series 2011-1 and 2012-1 notes:

GE EMT 2011-1

--Class A-3 affirmed at 'AAAsf'; Outlook Stable;

--Class A-4 affirmed at 'AAAsf'; Outlook Stable;

--Class B affirmed at 'AAAsf'; Outlook Stable;

GE EMT 2012-1

--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.

KEY RATING DRIVERS

The upgrade of GE EMT 2012-1 to 'AAAsf' reflects the net loss coverage levels for the class. Additionally, the affirmation of GE EMT 2011-1 and the class A notes in 2012-1 reflects the continued strong credit enhancement growth and loss coverage growth commensurate with an 'AAAsf' rating. All notes have a Stable Outlook.

Both transactions continue to track well below Fitch's initial base cases. EMT 2011-1 has experienced 38bps of losses to date which suggests a pool factor forecast of 50bps. EMT 2012-1 has experienced only 21 bps of losses through May reporting and extrapolates to 40bps under the pool factor methodology. For these reviews, Fitch conservatively assumed a 1.00% proxy for both transactions. The resulting coverage multiples were well in excess of 20x for both transactions. Fitch will continue monitoring the performance of these transactions.

RATING SENSITIVITIES

As the transactions continue to deliver and benefit from the 50% excess turbo feature, credit enhancement is expected to continue increasing through the transactions' remaining lives. As such, the transactions are able to support loss coverage in excess of Fitch's initial expectations. For the transactions to reach the initial, EMT 2011-1 would need to experience in excess of 8.0% in losses for the remaining pool to reach Fitch's initial proxy of 2.35%. As EMT 2012-1 has less seasoning and less enhancement, the required losses for the remaining pool to reach the initial proxy of 2.00% are approximately 3.75%. Even under these extreme loss expectations, the transaction would most likely not be downgraded.

For Fitch's initial Key Rating Drivers, Rating Sensitivities and the full detail analysis for these transactions, please see the respective New Issue reports dated May 22, 2014 for 2011-1 and May 4, 2014 for 2012-1. Fitch's analysis of the Representations and Warranties (R&W) of these transactions can be found in 'GE Equipment Mid-Ticket, L.L.C Series 2011-1 - Appendix' and 'GE Equipment Mid-Ticket, L.L.C Series 2012-1 - Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated April 17, 2012.

Additional information is available at 'www.fitchratings.com'

Applicable Criteria and Related Research:

--'Criteria for Rating U.S. Equipment Lease and Loan ABS', (Dec 19, 2013);

--'Global Structured Finance Rating Criteria,' (May 20, 2014);

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (April 17, 2012);

--'GE Equipment Mid-Ticket, L.L.C Series 2011-1' (May 22, 2014);

--'GE Equipment Mid-Ticket, L.L.C Series 2011-1 - Appendix' (May 22, 2014);

--'GE Equipment Mid-Ticket, L.L.C Series 2012-1 ' (May 4, 2014);

--'GE Equipment Mid-Ticket, L.L.C Series 2012-1 - Appendix'

(May 4, 2014).

Applicable Criteria and Related Research:

Criteria for Rating U.S. Equipment Lease and Loan ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726362

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

GE Equipment Midticket LLC, Series 2011-1 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748677

GE Equipment Midticket LLC, Series 2011-1

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=747613

GE Equipment Midticket LLC, Series 2012-1

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736456

GE Equipment Midticket LLC, Series 2012-1 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=737476

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=833983

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

Thomas Kaiser, CPA

Associate Director

+1 312-368-3338

Fitch Ratings, Inc.

70 W. Madison Street

Chicago, IL 60602

or

Secondary Analyst

Du Trieu

Senior Director

+1 312-368-2091

or

Committee Chairperson

Bradley Sohl

Senior Director

+1 212-908-0792

or

Media Relations, New York

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Business Wire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters