Fitch Expects to Rate Volkswagen Auto Lease Trust 2011-A; Presale Issued

CHICAGO--(BUSINESS WIRE)--Fitch Ratings expects to assign the following ratings to Volkswagen Auto Lease Trust 2011-A:

--$159,000,000 class A-1 notes 'F1+sf';
--$270,000,000 class A-2 notes 'AAAsf', Outlook Stable;
--$251,000,000 class A-3 notes 'AAAsf', Outlook Stable; and
--$70,000,000 class A-4 notes 'AAAsf', Outlook Stable.

Key Rating Drivers

Strong Collateral Quality: The weighted average (WA) FICO score of 752 is consistent with prime auto lease ABS and indicates a strong lessee. The pool is also well seasoned and has a well-diversified contract maturity schedule; however, concentrations in leases greater than 36 months produce some back-ended contract maturities.

Credit Enhancement Structure: 2011-A incorporates a sequential-pay structure. Initial credit enhancement (CE) is 16.50% of the initial securitization value, growing to 18.50% of the initial securitization value. Initial excess spread is expected to be 5.25%.

Low Historical Loss Levels: Credit losses on VW Credit, Inc.'s (VCI) portfolio have returned to low levels in the past few years following increases in 2008-2009. Residual value (RV) realizations have returned to gains following significant losses in the 2008-2009 industry downturn.

Risks from Increasing Sales: While RV realizations have improved in recent years, Volkswagen Group (VW) has aggressive sales growth targets worldwide, including substantial growth in the U.S. A dramatic increase in future used vehicle supply could impair RV realizations.

New Model Introduction: 2011-A includes approximately 40% of vehicles for which no disposition data from the last industry downturn (2008-2009) was available. Fitch's analysis sought to evaluate these vehicles by looking to RV performance data for similar vehicle models.

Stable Origination/Underwriting/Servicing: Fitch believes VCI demonstrates adequate abilities as originator, underwriter, and servicer to service the 2011-A pool. VCI's ultimate parent VW retains an investment-grade rating by Fitch of 'A-/F2' with a Stable Rating Outlook.

Unstable Macroeconomic Conditions: While the wholesale vehicle market in the U.S. is currently strong, Fitch remains concerned over potential macroeconomic deterioration that could lead to increased credit and residual loss levels.

The presale report is available to all investors on Fitch's website at www.fitchratings.com. For more information about Fitch's comprehensive subscription service FitchResearch, which includes all presale reports, surveillance, and credit reports on more than 20 asset classes, contact product sales at [phone] or at [e-mail].

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria', Aug. 4, 2011;
--'Criteria for Rating U.S. Auto Lease ABS ', May 24, 2011.

Applicable Criteria and Related Research: Volkswagen Auto Lease Trust 2011-A (US ABS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656288

Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569
Criteria for Rating U.S. Auto Lease ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=629749

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