Fitch to Rate Nissan Auto Lease Trust 2014-B; Issues Presale

NEW YORK--()--Link to Fitch Ratings' Report: Nissan Auto Lease Trust 2014-B (US ABS) http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=787988

Fitch Ratings expects to assign the following ratings and Rating Outlooks to the notes issued by Nissan Auto Lease Trust 2014-B:

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

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

--Class A-2b 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

Stable Collateral Quality: The weighted average (WA) FICO score of 743 is consistent with prior NALT transactions. The pool is largely composed of 39-month leases, has seasoning of eight months. Additionally, the base residual value percentage has decreased to 67.6% from 70.1% for NALT 2014-A.

Adequate Credit Enhancement Structure: 2014-B incorporates a sequential-pay structure. Initial credit enhancement (CE) is expected to be 16.50% of the initial securitization value, growing to 17.50% of the initial securitization value. Excess spread is expected to be 4.93%.

Improved Credit Loss: Credit losses on NMAC's portfolio and recent NALT securitizations have declined significantly from the elevated levels seen in 2007 and 2008. This trend has been supported by the improved obligor credit quality and higher recovery rates in recent securitizations.

Weakening Residual Performance: Residual loss performance for the NMAC platform has softened through fiscal year-end 2014. Infiniti vehicles, in particular, have played a larger role in driving losses. However losses are still well below peak 2008-2009 levels for both the Nissan and Infiniti brands.

Evolving Wholesale Market: The U.S. wholesale vehicle market has been normalizing following strong performance in recent years. Fitch expects that increasing off-lease vehicle supply and pressure from increased production levels will lead to decreased residual realizations during the life of the transaction.

Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of NMAC would not impair the timeliness of payments on securities.

RATING SENSITIVITIES

Unanticipated decreases in the value of returned vehicles and/or increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. This would likely result in declines of credit enhancement and loss coverage levels available to the notes. Hence, Fitch conducts sensitivity analyses by increasing the transaction's initial base case RV and credit loss assumptions and examining the rating implications on all classes of issued notes. The increases to the base case losses are applied such that they represent moderate (1.5x) and severe (2.5X) stresses, respectively, and are intended to provide an indication of the rating sensitivity of notes to unexpected deterioration of a trust's performance.

Key rating drivers and rating sensitivities are further detailed in Fitch's presale report, available at 'www.fitchratings.com' or by clicking on the above link.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Criteria for Rating U.S. Auto Lease ABS' (April 24, 2014);

--'Structured Finance Tranche Thickness Metrics'(July 29, 2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

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

Criteria for Rating U.S. Auto Lease ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=746763

Structured Finance Tranche Thickness Metrics

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646951

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=890834

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
Puloma Mukherjee, +1-212-908-9131
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street, New York, NY, 10004
or
Secondary Analyst
Timothy McNally, +1-212-908-0870
Analyst
or
Committee Chairperson
Bradley Sohl, +1-212-908-0792
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Puloma Mukherjee, +1-212-908-9131
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street, New York, NY, 10004
or
Secondary Analyst
Timothy McNally, +1-212-908-0870
Analyst
or
Committee Chairperson
Bradley Sohl, +1-212-908-0792
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com