Dec 5 - Fitch Ratings has affirmed Scandinavian Consumer Loans III's (SCL
III) notes backed by Swedish unsecured consumer loan receivables ratings as
SEK1,082m class A notes: 'AAAsf'; Outlook Stable
SEK96.0m class B notes: 'AAsf'; Outlook Stable
SEK193.0m class C notes: 'Asf'; Outlook Stable
SEK560.0m class D notes: Not rated
The rating action reflects the transaction's robust performance as supported by
low pool delinquencies and defaults.
SCL III is incorporated in Sweden as a special purpose vehicle with limited
liability and is wholly owned by Nordax Finans AB Publ (Nordax, the originator,
seller, servicer, and cash manager). The securities are backed by a revolving
pool of unsecured consumer loans originated in Sweden.
Some discrepancies in reported performance data, in particular performance
linked to the asset balance, came to light during the review. Nordax
investigated the issue and detected two errors in their reporting system which
had led to an incorrect allocation of funds and a declining collateral balance
in previous periods, leaving the transaction under-collateralised. Nordax
meanwhile confirmed in a public announcement that it has rectified the technical
errors and has, as per 3 December 2012, posted an amount of approximately SEK64m
in cash into the issuer's account to close the under-collateralisation. This
amount will be used to purchase receivables in the coming periods. Due to the
reporting corrections underway, Fitch will have a focus on the upcoming monthly
reports and will review the transaction again in the next four months.
Aside from the above mentioned discrepancies, and after investigating the
reporting errors, Nordax confirmed that all other performance data provided so
far are accurate. The delinquency rate has been quite stable over time and as
per the latest reporting date (November 2012) equalled 1.43% of the outstanding
portfolio. The cumulative default rate has been 1.46% which is below the
agency's initial base case assumption at the same point in seasoning (4.0%).
Overall, asset performance is in line or even better than initially anticipated
The deal closed on the 8 December 2011 and has a 36 month revolving period that
will end in December 2014, unless terminated earlier following an early
amortisation event. After the revolving period has ended, the notes will start
amortising in sequential order. A step-up date will occur 12 months after the
notes have started amortising whereby the note margins will double.
Additional information is available at www.fitchratings.com.
The ratings above were solicited by, or on behalf of, the issuer, and therefore,
Fitch has been compensated for the provision of the ratings.
The source of information used to analyse this transaction was Nordax Finanz AB
in its capacity as servicer for the transaction.
Applicable criteria, "Global Structured Finance Rating Criteria", dated 02
August 2012, "Counterparty criteria for Structured Finance Transactions", dated
30 May 2012 and "EMEA Consumer ABS Rating Criteria", dated 12 June 2012, are
available at www.fitchratings.com.
Applicable Criteria and