Fitch Affirms Textron 2002-CP-2, Series 2002-1; Outlook Revised to Negative

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed the Textron Financial Corporation Receivables Trust 2002-CP-2, series 2002-1 variable funding notes at 'BBBsf'. The Rating Outlook is revised to Negative from Stable.

Recent performance of the transaction has been within expectations. However, the Outlook revision is driven by top obligor concentrations, which have grown since the prior review, and balloon payments that will come due within the next 24 months. While Fitch expects the top obligor concentrations to decline over this timeframe, if borrowers are unable to refinance or otherwise default on their obligations, potential losses could impact credit enhancement available to the notes.

KEY RATING DRIVERS

The affirmation reflects the available credit enhancement to the notes. Additionally, the collateral has displayed stable performance over the last 33 months within Fitch's expectations, as the trust has minimal delinquencies and losses. The Outlook revision is driven by growing obligor concentrations and balloon payments that will come due within the next 24 months. Fitch will continue monitoring the transaction. Negative rating actions could result from performance deterioration or material increases in obligor concentrations.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projection and impact available loss coverage and multiple levels for the transaction. Lower loss coverage could impact the rating and Rating Outlook depending on the extent of the decline in coverage.

The future performance of the collateral may become increasingly reliant on the performance of the largest obligors as concentrations are expected to continue increasing. Additionally, potential weakness in the wholesale business and personal aircraft market may cause greater loss severity on defaults. These factors may begin placing pressure on the notes which may cause a negative rating action in the future.

DUE DILIGENCE USAGE

No third-party due diligence was provided to or reviewed by Fitch in relation to this rating action.

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

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990841

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990841

Endorsement Policy

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

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150915006898/en/

Fitch Ratings
Primary Analyst
Thomas Kaiser, CPA
Associate Director
+1-312-368-3388
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Committee Chairperson
Hylton Heard
Senior Director
+1-212-908-0214
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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