Fitch Affirms GE Equipment Small Ticket LLC Series 2014-1; Revises Outlooks
27 March 2015 - 8:52PM
Business Wire
Fitch Ratings affirms the ratings and revises Outlooks on GE
Equipment Small Ticket L.L.C. Series 2014-1 (GE EST 2014-1) as
follows:
Affirm class A-2 at 'AAAsf' Outlook Stable
Affirm class A-3 at 'AAAsf' Outlook Stable
Affirm class A-4 at 'AAAsf' Outlook Stable
Class B affirmed at 'AAsf'; Outlook Revised to Positive from
Stable;
Class C affirmed at 'Asf'; Outlook Revised to Positive from
Stable;
KEY RATING DRIVERS
The affirmation of all outstanding classes in GE EST 2014-1 is
reflective of credit enhancement levels that are consistent with
the ratings and strong collateral performance to date. As of March
2015 reporting period, only 37 bps of cumulative net losses have
been experienced, which is lower than Fitch's initial expectations
for the pool.
The Positive Outlook designation for the class B and 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.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults and loss
severity could produce loss levels higher than the current
projected base case loss proxies which would impact available loss
coverage. 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 transactions, the notes were found to
have limited sensitivity to 1.5x and 2.5x higher of Fitch's base
case loss expectations. Initial Key Rating Drivers and Rating
Sensitivities are further described in Presale Report dated March
31, 2014.
To date, the transactions have exhibited strong performance with
losses well within Fitch's initial expectations with rising loss
coverage and multiple levels. As such, continued strong performance
for these transactions would most likely result in further positive
rating actions. Conversely, a material deterioration in performance
would have to occur within these asset pools to have potential
negative impact on the outstanding ratings.
Fitch's analysis of the Representations and Warranties (R&W)
of this transaction can be found in 'GE Equipment Small Ticket,
L.L.C Series 2014-1 - 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 March
26, 2015.
Applicable Criteria and Related Research:
--'Criteria for Rating U.S. Equipment Lease and Loan ABS' (Dec.
23, 2014');
--'Global Structured Finance Rating Criteria' (Aug. 4,
2014);
--'Representations, Warranties, and Enforcement Mechanisms in
Global Structured Finance Transactions' (March 26, 2015).
--'GE Equipment Small Ticket, L.L.C Series 2014-1' (March 31,
2014);
--'GE Equipment Small Ticket, L.L.C Series 2014-1 - Appendix'
(March 31, 2014).
Additional Disclosure
Solicitation
Statushttp://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=982083
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Fitch RatingsPrimary AnalystThomas Kaiser, CPA,
+1-312-368-3338Associate DirectorFitch Ratings, Inc.70 W Madison
St.Chicago, IL 60602orSecondary AnalystDu Trieu,
+1-312-368-2091Senior DirectororCommittee ChairpersonHylton Heard,
+1-212-908-0214Senior DirectororMedia Relations, New YorkSandro
Scenga, +1-212-908-0278sandro.scenga@fitchratings.com