Fitch Affirms 3 and Upgrades 1 Class of Susquehanna Auto Receivables Trust 2014-1; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms three and upgrades one class of Susquehanna Auto Receivables Trust 2014-1 (SART 2014-1) as follows:

--Class A-2 asset-backed notes affirmed at 'AAAsf'; Outlook Stable;

--Class A-3 asset-backed notes affirmed at 'AAAsf'; Outlook Stable;

--Class A-4 asset-backed notes affirmed at 'AAAsf'; Outlook Stable;

--Class B asset-backed notes upgraded to 'Asf' from 'A-sf'; Outlook revised to Positive from Stable.

KEY RATING DRIVERS

The transaction has exceeded performance to date relative to Fitch's initial cumulative net loss (CNL) expectation of 1.25% with current CNL at 0.15%. The affirmations of the A-2, A-3 and A-4 notes reflect loss coverage levels consistent with current ratings. The upgrade to the class B notes reflects the positive performance of the transaction and the growth in loss coverage available to the notes in Fitch's modelling scenarios.

Following the acquisition of Susquehanna Bancshares Inc. (SBI) on August 1, 2015 by BB&T Corporation (BB&T), Hann Financial (Hann) will take over all servicing responsibilities for the portfolio, including collections and repossession activity. Hann, currently a wholly-owned subsidiary of SBI and servicer to approximately 25% of the collateral, will assume all servicing and administrative responsibilities for SART 2014-1. Fitch does not believe BB&T's acquisition of SBI will have an impact on performance and deems Hann an adequate servicer capable of servicing the SART 2014-1 pool.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxy and impact available loss coverage and multiple levels. Lower loss coverage could impact ratings and 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 a 1.5x and 2.5x increase of Fitch's base case loss expectation. To date, the transaction has exhibited strong performance with losses well within Fitch's initial expectation with rising loss coverage and multiple levels. As such, a material deterioration in performance would have to occur within the asset pool to have potential negative impact on the outstanding ratings.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to these rating actions.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Rating Criteria for U.S. Auto Loan ABS (pub. 10 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863979

Related Research

Susquehanna Auto Receivables Trust 2014-1 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=753728

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=988361

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=988361

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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View source version on businesswire.com: http://www.businesswire.com/news/home/20150722006426/en/

Fitch Ratings
Primary Analyst:
Timothy McNally, +1 212-908-0870
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 11001
or
Committee Chairperson:
Kevin Corrigan, +1 212-908-1156
Senior Director
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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