Fitch Affirms CNH Equipment Trust 2014-C

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings takes various rating actions on CNH Equipment Trust 2014-C. A full list of rating actions follows at the end of this ratings action commentary.

KEY RATING DRIVERS

The affirmations of the class A and the upgrade to the class B notes reflect loss coverage levels consistent with the ratings of 'AAAsf' and 'AAsf', respectively. As of the September 2015 reporting period, cumulative net losses totaled 10 basis points, and as such, the transaction is extrapolating below Fitch's initial base case loss proxy. The Stable Outlook for the class A notes reflects Fitch's expectation for loss coverage and credit enhancement to continue to improve as the transaction amortizes. The Outlook revision to Positive for the class B notes reflects the possibility for positive rating actions in the next 12 to 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 proxy, 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 transaction, the notes were found to have limited sensitivity to 1.5x and 2.5x higher of Fitch's base case loss expectation. Initial key rating drivers and rating sensitivities are further described in the new issue report published Oct. 8, 2014.

To date, the transaction has exhibited strong performance with losses within Fitch's initial expectations with rising loss coverage and multiple levels. As such, continued strong performance for the transaction would most likely result in continued stable ratings. Conversely, 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 this rating action.

Fitch's analysis of the Representations and Warranties (R&W) of CNH 2014-C can be found in 'CNH Equipment Trust 2014-C - 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 June 12, 2015.

Fitch has taken the following rating actions on CNH Equipment Trust 2014-C:

--Class A-2 affirmed at 'AAAsf'; Outlook Stable;

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

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

--Class B upgraded to 'AAsf' from 'Asf'; Outlook revised to Positive from Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Criteria for Rating U.S. Equipment Lease and Loan ABS (pub. 23 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=830328

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

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

Related Research

CNH Equipment Trust 2014-C: Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=791968

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=991203

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=991203

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/20150923006024/en/

Fitch Ratings
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Source: Fitch Ratings

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