Fitch Affirms Su Casita Trust Class A and Class B Notes

MONTERREY, Mexico--(BUSINESS WIRE)-- Fitch Ratings has affirmed Su Casita Trust's two residential mortgage back securities (RMBS) sponsored by Hipotecaria Su Casita, S.A. de C.V., SOFOM, E.N.R. (Su Casita):

Class A Floating Rate Notes due 2035

--Long-term rating affirmed at 'CCsf' and 'CC(mex)vra'

Class B UDI-Indexed Notes due 2035

--National long-term rating affirmed at 'D(mex)'.

KEY RATING DRIVERS

The ratings on the Class A and Class B notes reflect the transaction's liquidity risk and high exposure to non-performing loans and Real Estate Owned Assets (REOs). The rating of the Class B notes considers the tranche's structural subordination to Class A and its consistent default on accrued interest payments. The repayment on the Class A notes is becoming increasingly dependent on an unrated third party guarantee.

As of the April 2015 distribution date, Class A overcollateralization (excluding +90 days delinquent loans from the loan pool) stands at -121.7% and -102.0% when excluding +180 days delinquent loans. Both levels negatively compare with those observed 12 months ago which were -71.8% and -55.6%, respectively.

As of the April 2015 distribution date, +90 days delinquent loans represent 26.2% of their original loan balance and 65.1% of their aggregate outstanding balance. Fitch notices late delinquent loans (+180 days) are gradually increasing and could result in lengthen recovery processes. REOs sales are also intermittent and the observed recovery rates shown by the new substitute servicer reflect an average of approximately 50% (of the respective loan outstanding balance). In Fitch's view, interest payments on the notes are increasingly dependent on REO sales.

Fitch will monitor performance and progress of the new substitute servicer, Adamantine Servicios S.A. de C.V. This is the second substitute servicer for the loan portfolio and efforts will be focused on increasing cashflows through restructuring delinquent loans and potential sales of REOs. While the servicer substitution process has been reasonably managed and the migration between servicers is complete, Fitch's believes certain operational risks could result in additional delays in collections as new servicing initiatives are implemented and borrowers start adapting to this servicing platform.

RATING SENSITIVITIES

Class A's ratings exhibit limited upgrade potential. Among other factors, a downgraded would occur if REO management deteriorates; if special collection efforts do not result in better recovery prospects in the foreseeable future; and if the third party guarantee would stop making payments since Class A's interest and principal payment have become more dependent on such external credit protection. As of this date, Recovery Estimates (RE) for the Class A outstanding balance (without considering the third party guarantee) are deemed to be approximately 75% (RE75%).

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (31 March 2015);

--'Rating Criteria for RMBS in Latin America' (22 January 2015);

--'RMBS Latin America Criteria Addendum - Mexico' (28 July 2014);

--'Criteria for Rating Securitizations in Emerging Markets' (6 November 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

Rating Criteria for RMBS in Latin America

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=839629

Criteria for Rating Securitizations in Emerging Markets

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=809588

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=984457

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
Rene Ibarra
Senior Director
+52 (81) 8399 9130
Fitch Mexico S.A. de C.V.
or
Secondary Analyst
Elsa Segura
Associate Director
+52 (81) 8399 9100
or
Committee Chairperson
Greg Kabance
Managing Director
+1-312-368-2052
or
Media Relations
Elizabeth Fogerty
+1-212-908-0526
New York
[email protected]

Source: Fitch Ratings

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