Fitch Affirms GE EMT 2014-1 and Revises One Outlook

NEW YORK--()--Fitch Ratings has taken the following rating actions on GE Equipment Midticket LLC (GE EMT), series 2014-1 notes:

--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 affirmed at 'AAsf'; Outlook to Positive from Stable.

KEY RATING DRIVERS

The affirmation of the notes reflects the growing credit enhancement (CE) available to both classes providing higher net loss coverage levels than at close. The transaction's 4 basis points (bps) of losses is tracking below Fitch's initial base case and extrapolates to 18bps. Consistent with initial review of the transaction, Fitch remains cautious on the growing obligor concentrations in the pool. However, Fitch's Outlook revision on class B to Positive reflects the expectation of continued CE build which will mitigate this risk. Fitch will continue monitoring the performance of this transaction and may take additional rating actions.

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 the transaction, 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 the presale report published Sept. 8, 2014, available at www.fitchratings.com.

To date, the transaction has exhibited strong performance with losses within Fitch's initial expectations, with rising loss coverage and increasing multiples. As such, continued strong performance for this transaction would most likely result in 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.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch's analysis of the Representations and Warranties (R&W) of this transactions can be found in 'GE Equipment Mid-Ticket, L.L.C Series 2014-1 - 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 Global Structured Finance Transactions' dated March 26, 2015.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Rating U.S. Equipment Lease and Loan ABS (pub. 23 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=830328

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Related Research

GE Equipment Midticket LLC, Series 2014-1 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=772288

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989728

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989728

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Surveillance Analyst
Thomas Kaiser, CPA
Associate Director
+1 312-368-3338
Fitch Ratings, Inc.
70 W Madison
Chicago, IL 60602
or
Committee Chairperson
Hylton Heard
Senior Director
+1 212-908-0214
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Surveillance Analyst
Thomas Kaiser, CPA
Associate Director
+1 312-368-3338
Fitch Ratings, Inc.
70 W Madison
Chicago, IL 60602
or
Committee Chairperson
Hylton Heard
Senior Director
+1 212-908-0214
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com