Fitch Rates Nissan Auto Lease Trust 2014-B

NEW YORK--()--Fitch Ratings assigns ratings and Outlooks to the following classes of notes issued by Nissan Auto Lease Trust 2014-B:

--$124,000,000 Class A-1 asset-backed notes 'F1+sf';

--$137,000,000 Class A-2a asset-backed notes 'AAAsf'; Outlook Stable;

--$260,000,000 Class A-2b asset-backed notes 'AAAsf'; Outlook Stable;

--$296,000,000 Class A-3 asset-backed notes 'AAAsf'; Outlook Stable;

--$129,050,000 Class A-4 asset-backed notes 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

Stable Collateral Quality: The weighted average (WA) FICO score of 744 is consistent with prior NALT transactions. The pool is largely composed of 39-month leases, has seasoning of 9 months, and the base residual value percentage has decreased to 68.2% 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 5.1%.

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 and 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.

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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=898954

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Contacts

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

Contacts

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