Fitch Ratings rates Enterprise Fleet Financing LLC, Series
2015-2 as follows:
--$216,000,000 class A-1 notes 'F1+sf';
--$503,000,000 class A-2 notes 'AAAsf'; Outlook Stable;
--$131,200,000 class A-3 notes 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
Strong Credit Quality Obligors: Although the vast majority of
the collateral is not rated by any nationally recognized
statistical rating organization (NRSRO), EFM's portfolio has
experienced minimal delinquencies and net losses. In its analysis,
Fitch assumed a 'B' rating for unrated obligors.
Strong Portfolio Diversification: Obligor and industry
concentrations are minimal. The single most concentrated obligor
represents 0.66% of the pool, while the top industry -- oil and
gas--represents only approximately 11.2%. However, consistent with
prior transactions, there is a large concentration of light and
medium duty trucks, which comprise approximately 83% of the
pool.
Low Delinquency and Loss History: EFM's historical managed
portfolio and prior transaction delinquency and loss experience has
been low, even during periods marked by elevated levels in other
consumer and commercial asset classes due to a weak economy.
Sufficient Credit Enhancement (CE): Initial hard CE is virtually
unchanged from the 2015-1 transaction (not rated by Fitch). Total
initial CE (8.65%) is sufficient to support Fitch's 'AAAsf'
stressed loss assumption of 11.92%.
Minimal Residual Risk: Approximately 97% of the 2015-2 leases
are open-end leases, meaning the lessees bear the residual risk.
The remaining 3% are closed-end leases, under which the trust will
bear the wholesale market risk.
Quality Origination, Underwriting and Servicing Platform: EFM
has demonstrated adequate capabilities as originator, underwriter
and servicer, as evidenced by historical delinquency and loss
performance of securitized trusts and the managed portfolio.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults could
produce default levels higher than the projected base case default
proxy and impact available default coverage and multiples levels.
Lower default 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 changes in obligor credit profiles and
recovery rates associated with the high concentration of truck
collateral in the pool. Further details can be found in the presale
report.
Key Rating Drivers and Rating Sensitivities are further detailed
in the accompanying presale report, available at
'www.fitchratings.com' or by clicking on the above link.
DUE DILIGENCE USAGE
Fitch was provided with third-party due diligence information
from Ernst & Young LLP. The third-party due diligence focused
on comparing or recalculating certain information with respect to
150 leases from the final data file. Fitch considered this
information in its analysis and the findings did not have an impact
on our analysis. A copy of the ABS Due Diligence Form-15E received
by Fitch in connection with this transaction may be obtained
through the link contained on the bottom of the related rating
action commentary.
Fitch's analysis of the Representations and Warranties (R&W)
of this transaction can be found in Enterprise Fleet Financing,
L.L.C. Series 2015-1 - 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 June
12, 2015.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Counterparty Criteria for Structured Finance and Covered Bonds
(pub. 14 May 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
Criteria for Rating U.S. Auto Lease ABS (pub. 24 Apr 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864500
Global Rating Criteria for Corporate CDOs (pub. 25 Jul 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=753057
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
Related Research
Enterprise Fleet Financing, LLC Series 2015-2 -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868148
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=988691
ABS Due Diligence Form 15E
https://www.fitchratings.com/creditdesk/press_releases/content/ridf15E_frame.cfm?pr_id=988691&flm_nm=15e_988691_1.pdf
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=988691
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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Fitch RatingsPrimary AnalystThomas Kaiser, CPAAssociate
Director+1-312-368-3338Fitch Ratings, Inc.70 West Madison
StreetChicago, IL 60602orSecondary AnalystDu TrieuSenior
Director+1-312-368-2091orCommittee ChairpersonJohn BellaManaging
Director+1-212-908-0243orMedia Relations:Sandro Scenga, +1
212-908-0278sandro.scenga@fitchratings.com