RPT-Fitch Assigns Flexi ABS Trust 2013-2 Expected Ratings
(Repeat for additional subscribers)
Aug 26 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned Flexi ABS Trust 2013-2, which is backed by small balance consumer loan receivables, due September 2017, expected ratings as follows:
AUD94.5m Class A1 notes: F1+(EXP)sf
AUD113.4m Class A2 notes: 'AAA(EXP)sf; Outlook Stable
AUD24.3m Class B notes: 'AA(EXP)sf; Outlook Stable
AUD10.8m Class C notes: 'A(EXP)sf; Outlook Stable
AUD8.1m Class D notes: BBB(EXP)sf; Outlook Stable
AUD5.4m Class E notes: BB(EXP)sf; Outlook Stable
AUD13.5m Class F notes: not rated
The notes will be issued by Perpetual Trustee Company Limited in its capacity as trustee of Flexi ABS Trust 2013-2. The Flexi ABS Trust 2013-2 is a legally distinct trust established pursuant to a master trust and security trust deed.
The assignment of final ratings is contingent on the receipt of documents conforming to information already received.
At the cut-off date, the total collateral pool consisted of 127,541 consumer loan receivables totalling approximately AUD264.9m, with an average size of AUD2,077 each. The loan receivables, originated by Certegy Ezi-Pay Pty Ltd (Certegy) whose ultimate parent is FlexiGroup Limited, are retail point-of-sale interest-free consumer finance receivables that finance a wide range of products; jewellery (15.7%); home-related products such as solar energy (51.1%); fitness equipment (5.8%); and a broad cross-section of other products.
KEY RATING DRIVERS
The 'F1+(EXP)sf' Short-term rating and the 'AAA(EXP)sf' Long-Term ratings with Stable Outlook assigned to the Class A1 and A2 notes respectively are based on the 23% credit enhancement provided by the subordinate classes of notes and significant excess spread available to offset potential losses. The ratings also take into account a short weighted average life, the small average contract size and a diverse range of financed products, bringing a broad range of obligors to the transaction.
The expected Long-Term ratings with Stable Outlook assigned to the Class B, C, D and E notes are based on all the strengths supporting the Class A notes except their credit enhancement levels.
Increases in the frequency of defaults could produce loss levels higher than Fitch's base case, which could result in negative rating actions on the notes.
Fitch evaluated the sensitivity of the ratings of Flexi ABS Trust 2013-2 to increased defaults over the life of the transaction. Its analysis found that collectively the Class A1 notes' ratings remained stable under all of Fitch's stress levels, while all other notes were impacted only after increases in defaults of at least 50%.
Fitch's key rating drivers and rating sensitivity analysis is discussed in the corresponding presale report entitled "Flexi ABS Trust 2013-2", published today. Included as an appendix to the report are a description of the representations, warranties, and enforcement mechanisms.
Link to Fitch Ratings' Report: Flexi ABS Trust 2013-2
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