Fitch Affirms Kubota Credit Owner Trust 2014-1

CHICAGO--()--Fitch Ratings has taken the following rating actions on Kubota Credit Owner Trust 2014-1:

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

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

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

KEY RATING DRIVERS

The affirmation of the class A notes reflects loss coverage levels consistent with the 'AAAsf' rating. The Stable Outlook reflects Fitch's expectation for loss coverage and credit enhancement to continue to improve as the transaction amortizes. As of the March 2015 reporting period, cumulative net losses totaled 11 bps for 2014-1. Loss performance is forecasting below Fitch's initial base case loss proxy.

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 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 expectation. Initial key rating drivers and rating sensitivities are further described in the presale reports dated April 14, 2014.

To date, the transaction has exhibited strong performance with losses within Fitch's initial expectations, resulting in rising loss coverage and multiple levels. As such, continued strong performance would most likely result in further 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.

Fitch's analysis of the Representations and Warranties (R&W) for the 2014-1 transaction can be found in 'Kubota Credit Owner Trust 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 and Related Research:

--'Criteria for Rating U.S. Equipment Lease and Loan ABS' (Dec 23, 2014);

--'Global Structured Finance Rating Criteria' (Mar 31, 2015);

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (Mar 26, 2015);

--'Kubota Credit Owner Trust 2014-1' (Apr 14, 2014);

--'Kubota Credit Owner Trust 2014-1 - Appendix' (Apr 14, 2014).

Applicable Criteria and Related Research:

Criteria for Rating U.S. Equipment Lease and Loan ABS

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

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863817

Kubota Credit Owner Trust 2014-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=746116

Kubota Credit Owner Trust 2014-1 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=746475

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=982834

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Andrew Tinari
Analyst
+1 312-368-3127
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Du Trieu
Senior Director
+1 312-368-2091
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
Andrew Tinari
Analyst
+1 312-368-3127
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Du Trieu
Senior Director
+1 312-368-2091
or
Committee Chairperson
Bradley Sohl
Senior Director
+1 212-908-0792
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com