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RPT-Fitch affirms SCF Rahoituspalvelut at 'AAAsf'; outlook stable
March 18, 2014 / 12:05 PM / 4 years ago

RPT-Fitch affirms SCF Rahoituspalvelut at 'AAAsf'; outlook stable

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March 18 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has affirmed the rating of SCF Rahoituspalvelut Limited as follows:

EUR39.5m Class A notes affirmed at ‘AAAsf’; Outlook Stable

The transaction is a securitisation of auto loan receivables originated to Finnish individuals and companies by Santander Consumer Finance Oy, a 100% subsidiary of the Norway-based Santander Consumer Bank AS, which is a 100% subsidiary of Santander Consumer Finance, S.A. (BBB+/Stable/F2).

Key Rating Drivers

The rating action reflects the transaction’s solid performance as well as significant credit enhancement due to amortisation.

Cumulative defaults and losses amounted to 0.59% and 0.23% as of end-January 2014 and are below Fitch’s expectations. While early stage (30 to 60 days) delinquencies have been increasing since closing in April 2012, later stage delinquencies have remained stable and low with 90+ arrears at 0.25% as of end-January 2014.

The transaction’s reserve fund started amortising in line with its target level after the asset balance reached 50% of its initial amount in June 2013. It currently stands at EUR3.6m and, if unused, will amortise to a floor of EUR 2.4m. Excess spread has remained at healthy levels to date and comfortably covered all losses so far without any requirement to draw upon the reserve fund.

Fitch’s lifetime default and loss expectations have been revised to 1.5% and 0.45% respectively in light of the solid performance.

Rating Sensitivities

Expected impact upon the note rating of increased defaults (class A):

Current Rating: ‘AAAsf’

Increase base case defaults by 25%: ‘AAAsf’

Expected impact upon the note rating of reduced recoveries (class A):

Current Rating: ‘AAAsf’

Reduce base case recovery by 25%: ‘AAAsf’

Expected impact upon the note rating of increased defaults and reduced recoveries (class A):

Current Rating: ‘AAAsf’

Increase default base case by 25%; reduce recovery base case by 25%: ‘AAAsf’ As at end-January 2014, the pool consisted of 18,293 loan contracts. Of this, 64% was made up of fully amortising contracts and 36% of balloon loans.

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