Fitch Publishes Updated Global Rental Fleet ABS Criteria

NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Global Rating Criteria for Rental Fleet ABS

https://www.fitchratings.com/site/re/886929

Fitch Ratings today published an updated Asset-Backed sector specific criteria report titled "Global Rating Criteria for Rental Fleet ABS."

The updated criteria is substantially unchanged from the prior one. This report updates and replaces the prior criteria report with the title "Global Rating Criteria for Rental Fleet ABS", dated Sept. 8, 2015.

The report presents Fitch's analytical approach to rating Global Rental Fleet ABS and outlines the unique features of these transactions. Additionally, the report details key rating drivers associated with Global Rental Fleet as detailed below.

Collateral Analysis: Fitch determines the diversity and quality of a securitized pool by analyzing vehicle make, model and segment concentrations, manufacturer/brand mix, age of vehicles and geographic concentrations. Based on the diversity classification, Fitch applies different levels of stress to the expected liquidation proceeds of the vehicles.

Vehicle Value Risks: Fitch analyzes the risk of collateral value depreciation prior to a vehicle liquidation in a bankruptcy scenario, and the residual risk of realizing mark-to-market losses on the actual sale of the collateral. This analysis is driven by historical vehicle depreciation rates, disposition losses and casualty losses, all provided by the rental fleet company (RFC), as well as historical vehicle value volatility observed in the wholesale vehicle market.

Macroeconomic and Auto Industry Risks: The economic environment and state of the auto industry and wholesale vehicle market can have a material impact on rental fleet ABS ratings. Fitch takes these risks into consideration as well as future expectations and their impact on a transaction.

Rental Fleet Company/Servicer Operational Risks: Fitch's analysis includes a qualitative review of the RFC's operations, as well as a review of any backup servicers and liquidation agents in place in the transaction. Fitch will assess the ability to effectively replace the RFC and conduct a fleet liquidation in an orderly, efficient manner.

Transaction Analysis: Fitch analyzes transaction features present in RF ABS transactions, including monthly mark-to-market vehicle value tests and minimum monthly vehicle depreciation, by stressing the liquidation timing, vehicle depreciation, disposition losses and expected carrying costs of the transaction at various rating levels.

Transaction Structure: Fitch's legal analysis includes a review of the transaction's legal structure and opinions to verify, among other factors, the legal isolation of the assets from the originator, legal transfer of the assets to the issuing vehicle and tax status of the issuing vehicle.

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

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/20160831005926/en/

Fitch Ratings
Hylton Heard
Senior Director
+1-212-908-0214
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Timothy McNally
Associate Director
+1-212-908-0870
or
John Bella, Jr.
Managing Director
+1-212-908-0243
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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