Fitch Expects to Rate Volkswagen Auto Loan Enhanced Trust 2013-1; Presale Issued

CHICAGO--()--Fitch Ratings expects to assign the following ratings and Rating Outlooks to the notes issued by Volkswagen Auto Loan Enhanced Trust (VALET) 2013-1:

--Class A-1 asset-backed notes 'F1+sf';

--Class A-2 asset-backed notes 'AAAsf'; Outlook Stable;

--Class A-3 asset-backed notes 'AAAsf'; Outlook Stable;

--Class A-4 asset-backed notes 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

STRONG COLLATERAL QUALITY: The weighted average (WA) FICO of 763 is consistent with recently issued VALET transactions and, combined with the strong internal credit tier distribution, indicates a strong borrower. However, the pool contains an higher concentration of extended term loans, which have experienced greater losses historically.

SUFFICIENT CREDIT ENHANCEMENT (CE): 2013-1 incorporates a sequential-pay structure. Initial CE is 3.10% of the initial adjusted pool balance, growing to 3.50% of the initial securitization value. Annual excess spread is expected to be 1.81%. CE is sufficient to cover Fitch's 'AAAsf' stressed loss expectation.

STRONG PORTFOLIO/SECURITIZATION PERFORMANCE: Losses and delinquency levels on VCI's portfolio and prior securitizations have improved dramatically from peak levels in 2007 and 2008 and stabilized at lower levels.

UNSTABLE ECONOMIC OUTLOOK: A slower recovery and potential for volatility could affect delinquencies and losses. Fitch's analysis accounts for this risk by including poorer performing vintages from the recent recession in the base case loss analysis.

LEGAL STRUCTURE INTEGRITY: The legal structure of the transaction should provide that a bankruptcy of VCI would not impair the timeliness of payments on the securities.

STABLE ORIGINATION/UNDERWRITING/SERVICING: Fitch believes VCI to be a capable originator, underwriter, and servicer. These capabilities are further evidenced by historical portfolio delinquency and loss experience and securitization performance.

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 +1-212-908-0800 or at 'webmaster@fitchratings.com'.

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);

--'Criteria for Rating US Auto Loan ABS' (April 16, 2012).

Applicable Criteria and Related Research: Volkswagen Auto Loan Enhanced Trust 2013-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701679

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

Criteria for Rating U.S. Auto Lease ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678137

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.

Contacts

Fitch Ratings
Primary Analyst
Margaret Rowe, +1-312-368-3167
Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Bradley Sohl, +1-312-368-3127
Senior Director
or
Committee Chairperson
Du Trieu, +1-312-368-3167
Senior Director
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Margaret Rowe, +1-312-368-3167
Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Bradley Sohl, +1-312-368-3127
Senior Director
or
Committee Chairperson
Du Trieu, +1-312-368-3167
Senior Director
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com