Fitch Affirms Five Classes from Volkswagen Auto Loan Enhanced Trusts

NEW YORK--()--As part of its ongoing surveillance, Fitch Ratings affirms five classes of the Volkswagen Auto Loan Enhanced Trust Series 2012-1 & 2014-2 as detailed below:

2012-1

--Class A-3 at 'AAAsf'; Outlook Stable;

--Class A-4 at 'AAAsf'; Outlook Stable.

2014-2

--Class A-2 at 'AAAsf'; Outlook Stable;

--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 pools continue 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 transactions.

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 transactions. 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 transactions, 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 transactions have exhibited strong performance with losses well within Fitch's initial expectations with rising loss coverage and multiple levels. This increased loss coverage has further reduced the sensitivity of assigned ratings to increased loss levels.

Fitch's analysis of the Representation and Warranties (R&W) of the transactions in this review can be found in the respective appendices listed below. 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 March 26, 2015.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to these rating actions.

Additional information is available at www.fitchratings.com.

Applicable Criteria

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

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

Rating Criteria for U.S. Auto Loan ABS (pub. 10 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863979

Related Research

Volkswagen Auto Loan Enhanced Trust 2012-1 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=666811

Volkswagen Auto Loan Enhanced Trust 2014-2 - Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=793848

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990487

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990487

Endorsement Policy

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

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Contacts

Fitch Ratings
John Alberici
Associate Director
+1-212-908-0370
Fitch Ratings, Inc.
33 Whitehall Street
New York NY 10004
or
Committee Chairperson
Hylton Heard
Senior Director
+1-212-908-0214
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
John Alberici
Associate Director
+1-212-908-0370
Fitch Ratings, Inc.
33 Whitehall Street
New York NY 10004
or
Committee Chairperson
Hylton Heard
Senior Director
+1-212-908-0214
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com