Fitch Upgrades 2 Classes of GreatAmerica Leasing Receivables Funding, L.L.C. Series 2012-1

CHICAGO--()--Fitch Ratings has taken the following actions on GreatAmerica Leasing Receivables Funding, LLC Series 2012-1 (GALC 2012-1).

--Class A-3 affirmed at 'AAAsf'; Outlook Stable;

--Class A-4 affirmed at 'AAAsf'; Outlook Stable;

--Class B upgraded to 'AAAsf' from 'AAsf'; Outlook to Stable from Positive;

--Class C upgraded to 'AAsf' from 'Asf'; Outlook Positive.

KEY RATING DRIVERS

The affirmation of the class A notes and the upgrade of the class B and C notes reflect strong performance to date with 56 bps in net losses which is tracking below Fitch's initial expectations. Furthermore, loss coverage levels have improved due to increased credit enhancement (CE) and are consistent with the ratings. The Outlook for class C remains Positive, reflecting the potential for further positive rating actions on the class.

Fitch will continue to monitor this transaction and may take additional rating actions in the event of changes in performance and credit enhancement measures.

RATING SENSITIVITIES

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 Fitch's base case loss expectations.

To date, the transaction has exhibited strong performance with losses within Fitch's initial expectations, resulting in rising CE and loss coverage levels. As such, continued strong performance for this transaction would result in stable to 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.

Initial key rating drivers and rating sensitivities are further described in the presale report published March 2012. 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.

Applicable Criteria and Related Research:

--'Criteria for Rating U.S. Equipment Lease and Loan ABS' (Dec. 28, 2012);

--'Global Structured Finance Rating Criteria' (May 2013);

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (April 2012);

--'GreatAmerica Leasing Receivables Funding, L.L.C Series 2012-1 Presale Report' (March 2012);

--'GreatAmerica Leasing Receivables Funding, L.L.C Series 2012-1 - Appendix' (March 2012).

Applicable Criteria and Related Research:

Criteria for Rating U.S. Equipment Lease and Loan ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=697250

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

GreatAmerica Leasing Receivables Funding, L.L.C. Series 2012-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=674633

GreatAmerica Leasing Receivables Funding, L.L.C. Series 2012-1 - Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=674745

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=810402

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Thomas Kaiser, CPA, +1-312-368-3338
Analyst
70 W Madison Street
Chicago, IL 60602
or
Secondary Analyst
Peter Manofsky, +1-312-368-2068
Director
or
Committee Chairperson
Du Trieu, +1-312-368-2091
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings, Inc.
Primary Analyst
Thomas Kaiser, CPA, +1-312-368-3338
Analyst
70 W Madison Street
Chicago, IL 60602
or
Secondary Analyst
Peter Manofsky, +1-312-368-2068
Director
or
Committee Chairperson
Du Trieu, +1-312-368-2091
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com