CHICAGO--()--Fitch Ratings has affirmed the ratings of GreatAmerica Leasing Receivables Funding, LLC Series 2012-1 (GALR 2012-1) as follows:
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable;
--Class B at 'AAsf'; Outlook revised to Positive from Stable;
--Class C at 'Asf'; Outlook revised to Positive from Stable;
KEY RATING DRIVERS
The affirmation of the notes represents loss coverage and enhancement levels consistent with each class' respective rating. The transaction has performed well to date with net losses projecting below Fitch's initial base case expectation.
The Positive Outlook for the Class B and C Notes reflect the possibility for positive rating actions in the next 12 to 18 months as losses are tracking inside of initial expectations and credit support is expected to continue to increase. Fitch will continue to monitor this transaction and may take additional rating actions in the event of changes in performance and credit enhancement measures.
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxy which would impact available loss coverage. Lower loss coverage could impact ratings and rating outlooks, depending on the extent of the decline in coverage. In Fitch's initial review of the transaction, the notes were found to have limited sensitivity to 1.5x and 2.5x higher of Fitch's base case loss expectations. Initial key rating drivers and rating sensitivities are further described in the new issue report published on March 19, 2012.
To date, the transaction has exhibited strong performance with losses well within Fitch's initial expectations with rising loss coverage and multiple levels. As such, continued strong performance for this transaction would most likely result in further positive rating actions. Conversely, a material deterioration in performance would have to occur within the asset pool to have potential negative impact on the outstanding ratings.
Fitch's analysis of the Representations and Warranties (R&W) of this transaction can be found in 'GreatAmerica Leasing Receivables Funding, L.L.C Series 2012-1 - Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated April 17, 2012.
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);
--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (April 17, 2012);
--'Rating U.S. Equipment Lease and Loan Securitizations' (Dec. 28, 2012 );
--'GreatAmerica Leasing Receivables Funding, L.L.C Series 2012-1 - Appendix' (March 19, 2012);
Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended
Criteria for Rating U.S. Equipment Lease and Loan ABS
GreatAmerica Leasing Receivables Funding, L.L.C. Series 2012-1 - Appendix