Fitch Rates General DPR Funding, Ltd. Series 2016; Affirms Series 2012-A

CHICAGO--()--Fitch Ratings has assigned 'A' ratings to the series 2016 issued by General DPR Funding, Ltd. and affirmed the 'A' rating assigned to the Series 2012-A. The Rating Outlook is Stable. A full list of rating actions follows at the end of this press release.

Established in 2012, the future flow program is backed by U.S. dollar-denominated existing and future diversified payment rights (DPRs) originated by Banco General S.A. (BG). The majority of DPRs are processed by designated depository banks (DDBs) that have signed account agreements (AAs). Fitch's ratings address timely payment of interest and principal on a quarterly basis.

KEY RATING DRIVERS

Originator Credit Quality: BG's long-term Issuer Default Rating (IDR; 'BBB+'/Outlook Stable) and Viability Rating (VR; 'bbb+') reflect the bank's sound operating environment, solid franchise, sound and consistent performance, robust capital levels, conservative policies, good asset quality and reserves, ample deposit base, and well-diversified portfolio. The Rating Outlook is Stable.

Going Concern Assessment Score: Fitch has assigned a going concern assessment score (GCA) score of 'GC1' to BG, reflecting its position as Panama's largest locally-owned bank. The GCA score serves as a rating cap on the future flow transaction, but Fitch tempers notching uplift for highly-rated originators and other risk factors result in a rating below the maximum achievable rating.

Strength of DPR Program: DPRs are supported by BG's dominant position in corporate and retail banking, U.S. and other international demand for Panamanian goods and services, transportation and logistics related to Panama's strategic location, re-exportation of goods through the Colon Free Trade Zone, and wealth management activity. Fitch's expected quarterly debt service coverage ratio (DSCR) is approximately 43.0x. This calculation is based on average quarterly DDB collections for 2015 (discounting certain flows) and the maximum quarterly debt service for the life of the program. The program has performed in line with Fitch's expectations since transaction inception.

Low Level of Future Flow Debt: The outstanding balance of BG's future flow program, including the new issuance, is $320 million, which is approximately 2.3% of the bank's liabilities and 17.4% of its long-term funding.

DDB Concentration: Citibank N.A. (Citibank; 'A+'/Outlook Stable) processes nearly 80% of program DPRs. While Fitch believes the DPR program could survive the loss of Citibank, the ratings assigned to the transaction reflect this exposure.

No Lender of Last Resort: Panama's economy is dollarized and lacks a true lender of last resort. Nonetheless, certain mechanisms are in place to help fend off a banking system crisis. State-controlled Banco Nacional is positioned to provide liquidity to the system if and when necessary.

RATING SENSITIVITIES

The future flow program ratings are sensitive to changes in the credit quality of BG, the performance of the DPR business line, and changes in the sovereign environment. The expected quarterly DSCR is estimated to be 43.0x, and, therefore, should be able to withstand a significant decline in cash flows in the absence of additional issuance. A sensitivity analysis was run on the strength of collections and the interest rate to be paid on the floating-rate loan. Severe reductions in coverage levels could result in rating downgrades. Any change in these variables will be analyzed in a rating committee to assess the possible impact on the transaction ratings.

Fitch has assigned the following ratings:

--Series 2016-A due 2024 'A'; Outlook Stable;

--Series 2016-B due 2023 'A'; Outlook Stable.

Fitch has affirmed the following rating:

--Series 2012-A due 2019 at 'A'; Outlook Stable.

Additional information is available at www.fitchratings.com.

Sources of Information:

In addition to the sources of information identified in Fitch's master criteria, this action was additionally informed by information from BG.

Applicable Criteria

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 17 May 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=879815

Future Flow Securitization Rating Criteria (pub. 12 Aug 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868191

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=883130

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1008921

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1008921

Endorsement Policy

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

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Contacts

Fitch Ratings
Primary Analyst
Gregory Lane, +1-312-606-2304
Director
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Secondary Analyst
Jose Pablo Zuniga, +1-312-368-2053
Director
or
Committee Chairperson
Greg Kabance, +1-312-368-2052
Managing Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Gregory Lane, +1-312-606-2304
Director
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Secondary Analyst
Jose Pablo Zuniga, +1-312-368-2053
Director
or
Committee Chairperson
Greg Kabance, +1-312-368-2052
Managing Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com