NEW YORK--(BUSINESS WIRE)--As part of its ongoing surveillance, Fitch Ratings affirms two classes of the Volkswagen Auto Loan Enhanced Trust 2012-1 transaction as follows:
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
The ratings are based on available credit enhancement and loss performance. The collateral pool continues to perform within Fitch's expectations. Under the credit enhancement structure, the securities are able to withstand stress scenarios consistent with the current ratings and make full payments to investors in accordance with the terms of the documents.
The ratings reflect the quality of Volkswagen Credit Inc. retail auto loan originations, the strength of its servicing capabilities, and the sound financial and legal structure of the transaction.
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 and impact available loss coverage and multiples levels for the transaction. 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 a 1.5x and 2.5x increase of Fitch's base case loss expectation. To date, the transaction has exhibited strong performance with losses well within Fitch's initial expectations with rising loss coverage and multiple levels. As such, a material deterioration in performance would have to occur within the asset pool to have potential negative impact on the outstanding ratings.
Fitch's analysis of the Representation and Warranties (R&W) of this transaction can be found in 'Volkswagen Auto Loan Enhanced Trust 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 the Global Structured Finance Transactions' dated April 17, 2012.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and related research:
--'Rating Criteria for U.S. Auto Loan ABS' (April 7, 2014);
--'Global Structured Finance Rating Criteria' (August 4, 2014);
--'Volkswagen Auto Loan Enhanced Trust 2012-1 - Appendix' (Jan. 17, 2012).
Applicable Criteria and Related Research:
Rating Criteria for U.S. Auto Loan ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=738718
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
Volkswagen Auto Loan Enhanced Trust 2012-1 -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=666811
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=930236
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