CHICAGO--()--Fitch Ratings expects to rate Enterprise Fleet Financing LLC, series 2012-2 as follows:
--$169,000,000 class A-1 notes 'F1+sf';
--$339,000,000 class A-2 notes 'AAAsf'; Outlook Stable;
--$92,800,000 class A-3 notes 'AAAsf'; Outlook Stable.
Fitch's stress and rating sensitivity analysis are discussed in the presale report titled 'Enterprise Fleet Financing LLC, Series 2012-2, dated Sept. 17, 2012, which is available on Fitch's web site. The presale report details how Fitch addresses the key rating drivers which are summarized below.
Key Rating Drivers
Strong Credit Quality Obligors: Although the entire collateral pool comprises obligors not rated by any Nationally Recognized Statistical Rating Organization (NRSRO), EFM's portfolio has experienced minimal delinquencies and net losses. In its analysis, Fitch conservatively assumed a 'B' rating for all obligors.
Strong Portfolio Diversification: Obligor concentrations have decreased slightly relative to the EFF 2012-1 transaction. The top 20 obligors by lease balance represent 7.04% compared to 11.41% in 2012-1. Industry and vehicle concentrations are consistent with prior transactions, while closed-end lease concentration has increased
Minimal Residual Risk: Approximately 92% of the 2012-2 leases are open-end, meaning the lessees bear the residual risk. The remaining approximately 8% are closed-end leases, whereby EFM bears the residual risk. Therefore, the trust has limited exposure to closed-end residual risk and is only exposed to wholesale market risk in the event of an obligor default on the open-end portion of the portfolio.
Sufficient Credit Enhancement (CE): Hard CE has increased from the 2012-1 transaction. Total proposed CE is sufficient to support Fitch's stressed default and loss assumptions consistent with the expected ratings of 'F1+sf/AAAsf'.
Low Delinquency and Loss History: EFM's historical managed portfolio and prior transaction delinquency and loss experience is low, even during periods marked by elevated levels in other consumer and commercial asset classes due to a weak economy.
Quality Origination, Underwriting, & Servicing Platform: EFM has demonstrated strong capabilities as originator, underwriter, and servicer, as evidenced by historical delinquency and loss performance of securitized trusts and the managed portfolio.
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' (June 6, 2012);
--'Global Rating Criteria for Corporate CDOs' (Aug. 8, 2012);
--'Criteria for Rating US Auto Lease ABS' (May 14, 2012).
Applicable Criteria and Related Research: Enterprise Fleet Financing, LLC Series 2012-2 (US ABS)
Global Structured Finance Rating Criteria
Global Rating Criteria for Corporate CDOs
Criteria for Rating U.S. Auto Lease ABS