Fitch Takes Various Actions on CNH Equipment Trusts 2012-B and 2013-A

CHICAGO--()--Fitch Ratings has taken various rating actions on CNH Equipment Trusts 2012-B and 2013-A as follows:

CNH 2012-B

--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.

CNH 2013-A

--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 'AAsf' from 'Asf', Outlook Positive.

KEY RATING DRIVERS

The affirmation of the class A notes in both transactions reflects loss coverage levels consistent with the current ratings. As of the August 2014 reporting period, cumulative net losses totaled 26 basis points (bps) and 10 bps for 2012-B and 2013-A, respectively. Both are forecasting below Fitch's initial base case loss proxies. The Stable Outlook reflects Fitch's expectation for loss coverage and credit enhancement to continue to improve as the transactions amortize.

The upgrade of the class B notes for 2012-B and 2013-A reflects increased loss coverage levels commensurate with 'AAAsf' and 'AAsf' ratings, respectively. The Outlook being maintained at Positive for the 2013-A class B notes reflects the possibility for positive rating actions in the next 12 to 18 months.

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 impact ratings and rating outlooks, depending on the extent of the decline in coverage. In Fitch's initial review of each transaction, the notes were found to have limited sensitivity to 1.5x and 2.5x augmentations to Fitch's base case loss expectations. Initial key rating drivers and rating sensitivities are further described in the new issue reports published June 11, 2012 for CNH 2012-B and Feb. 11, 2013 for CNH 2013-A.

To date, the transactions have exhibited strong performance with losses below Fitch's initial expectations, rising loss coverage, and multiples that are consistent with Fitch's 'AAAsf' and 'AAsf' ranges. As such, continued strong performance for both transactions would result in continued stable ratings. Conversely, a material deterioration in performance would have to occur within the asset pools to have potential negative impact on the outstanding ratings.

Fitch's analysis of the Representations and Warranties (R&W) of CNH 2012-B and 2013-A can be found in the following appendices: 'CNH Equipment Trust 2012-B- Appendix' and 'CNH Equipment Trust 2013-A- Appendix'. These R&Ws are compared to those of typical R&Ws 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. 19, 2013);

--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (April 17, 2012);

--'CNH Equipment Trusts 2012-B' (June 11, 2012);

-- CNH Equipment Trusts 2012-B - Appendix' (June 11, 2012);

--'CNH Equipment Trusts 2013-A' (Feb. 11, 2013);

--'CNH Equipment Trusts 2013-A - Appendix' (Feb. 11, 2013).

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=726362

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

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

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

CNH Equipment Trust 2012-B (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681376

CNH Equipment Trust 2013-A (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701118

CNH Equipment Trust 2013-A - Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701252

CNH Equipment Trust 2012-B -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681531

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=859034

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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst:
Andrew Tinari, +1-312-368-3127
Analyst
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst:
Du Trieu, +1-312-368-2091
Senior Director
or
Committee Chairperson:
Bradley Sohl, +1-212-908-0792
Senior Director
or
Alyssa Castelli, +1-212-908-0540
Media Relations, New York
alyssa.castelli@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst:
Andrew Tinari, +1-312-368-3127
Analyst
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst:
Du Trieu, +1-312-368-2091
Senior Director
or
Committee Chairperson:
Bradley Sohl, +1-212-908-0792
Senior Director
or
Alyssa Castelli, +1-212-908-0540
Media Relations, New York
alyssa.castelli@fitchratings.com