Fitch Takes Various Actions on GE Equipment Transportation LLC Series 2012-1 and 2012-2

CHICAGO--()--Fitch Ratings upgrades and affirms classes of GE Equipment Transportation L.L.C. Series 2012-1 (GE ET 2012-1) and 2012-2 (GE ET 2012-2) as follows:

GE ET 2012-1

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

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

--Class B affirmed at 'AAAsf' Outlook Stable

--Class C upgraded to 'AAAsf' from 'AAsf', Outlook to Stable from Positive

GE ET 2012-2

--Class A-2 affirmed at 'AAAsf' Outlook Stable

--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 upgrades of the class C notes in 2012-1 and the class B and C notes in 2012-2 reflect the strong performance to date with cumulative net losses tracking inside of Fitch's initial expectations for both transactions. Furthermore, loss coverage has improved due to increasing credit enhancement and is consistent with the ratings. The affirmation of class A and B notes in 2012-1 and the class A notes in 2012-2 reflects net loss coverage levels consistent with their 'AAAsf' ratings.

The Positive Outlook for the 2012-2 class C notes reflects 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 for both transactions. Fitch will continue to closely monitor these transactions 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 proxies, which would impact available loss coverage. Lower loss coverage could affect ratings and Rating Outlooks, depending on the extent of the decline in coverage. In Fitch's initial review of the transactions, 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 GE ET 2012-1's presale report published March 12, 2012 and GE ET 2012-2's presale report published Oct. 15, 2012.

To date, the transactions have exhibited strong performance with losses within Fitch's initial expectations with rising loss coverage and multiple levels. As such, continued strong performance for these transactions would most likely result in stable to positive ratings. Conversely, low residual realization rates and deterioration in loss performance have the potential to cause a negative impact on the outstanding ratings.

Fitch's analysis of the Representations and Warranties (R&W) of these transactions can be found in 'GE Equipment Transportation, L.L.C Series 2012-1 - Appendix' and 'GE Equipment Transportation, L.L.C Series 2012-2 - 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' dated December 19, 2013;

--'Global Structured Finance Rating Criteria' dated May 24, 2013

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated April 17, 2012.

--'GE Equipment Transportation, L.L.C Series 2012-1' dated March 12, 2012

--'GE Equipment Transportation, L.L.C Series 2012-1 - Appendix' dated March 12, 2012

--'GE Equipment Transportation, L.L.C Series 2012-2' dated Oct. 15, 2012

--'GE Equipment Transportation, L.L.C Series 2012-2 - Appendix' dated Oct. 15, 2012

Applicable Criteria and Related Research:

GE Equipment Transportation LLC, Series 2012-2 (US ABS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=691575

GE Equipment Transportation LLC, Series 2012-2 -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=691861

GE Equipment Transportation LLC, Series 2012-1 (US ABS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=673711

GE Equipment Transportation LLC, Series 2012-1 -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=673714

Criteria for Rating U.S. Equipment Lease and Loan ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726362

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

Additional Disclosure

Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=829505

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Contacts

Fitch Ratings
Primary Analyst
Andrew Tinari, +1-312-368-3127
Analyst
Fitch Ratings, Inc.
70 W Madison St.
Chicago, IL 60602
or
Secondary Analyst
Du Trieu, +1-312-368-2091
or
Committee Chairperson
Kevin Corrigan, +1-212-908-1156
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Andrew Tinari, +1-312-368-3127
Analyst
Fitch Ratings, Inc.
70 W Madison St.
Chicago, IL 60602
or
Secondary Analyst
Du Trieu, +1-312-368-2091
or
Committee Chairperson
Kevin Corrigan, +1-212-908-1156
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com