Fitch Upgrades View ISINs
Fitch Upgrades Two Flexi ABS Notes; Affirms 13
(The following statement was released by the rating agency) SYDNEY, June 10 (Fitch) Fitch Ratings has upgraded two classes of Flexi ABS Trust 2013-2 and affirmed a total of thirteen from Flexi ABS Trust 2012-1, Flexi ABS Trust 2013-1 and Flexi ABS Trust 2013-2, as shown at the end of this commentary. Flexi ABS Trust 2012-1 and Flexi ABS Trust 2013-2 are securitisations backed by small balance consumer loan receivables. Flexi ABS Trust 2013-1 is backed by unsecured commercial lease receivables. The notes were issued by Perpetual Corporate Trust Limited in its capacity as trustee of the three transactions. KEY RATING DRIVERS Both the class B and C notes from Flexi ABS Trust 2013-2 have been upgraded by one notch as the transaction is performing better than Fitch’s expectations. The remaining classes have been affirmed as the transactions have performed within Fitch’s initial expectations since closing. Total net losses have been well below Fitch’s base cases to date and excess spread has been more than sufficient to cover any losses incurred. Flexi ABS Trust 2012-1: At 30 April 2014, the 30+days and 90+ day delinquency rates were 2.8% and 0.5% of the collateral pool, respectively. Cumulative losses since closing have been low, totalling AUD3.6m, below Fitch’s expected losses of AUD5.6m. Flexi ABS Trust 2013-1: At 30 April 2014, the 30+days and 90+ day delinquency rates were 9.9% and 0.8% of the collateral pool, respectively. The high level of 30+days arrears is due to a technical readjustment of payments. This is expected to be reversed in the coming months. Cumulative losses since closing have been low, totalling AUD2.3m, below Fitch’s expected losses of AUD4.1m. Flexi ABS Trust 2013-2: At 30 April 2014, the 30+days and 90+ day delinquency rates were 2.0% and 0.3% of the collateral pool, respectively. Cumulative losses since closing have been low, totalling AUD1.7m, below Fitch’s expected losses of AUD3.1m. RATING SENSITIVITIES The prospect for downgrades is considered remote, given the current performance of the pools, as well as adequate excess spread and subordination. The loans in the collateral pools are vulnerable to a drastic downturn in the Australian economy. The prospect for upgrades is remote, but may be considered if the transactions perform significantly better than expected. The rating actions are listed below: Flexi ABS Trust 2012-1 AUD21.1m Class A2 notes (ISIN AU3FN0016218): affirmed at ‘AAAsf’; Outlook Stable AUD6.1m Class B notes (ISIN AU3FN0016226): affirmed at ‘AAAsf’; Outlook Stable AUD2.5m Class C notes (ISIN AU3FN0016234): affirmed at ‘AAsf’; Outlook Stable AUD1.4m Class D notes (ISIN AU3FN0016242): affirmed at ‘BBB+sf’; Outlook Stable AUD1.1m Class E notes (ISIN AU3FN0016259): affirmed at ‘BB+sf’; Outlook Stable Flexi ABS Trust 2013-1 AUD85.9m Class A notes (ISIN AU3FN0019444): affirmed at ‘AAAsf’; Outlook Stable AUD9.1m Class B notes (ISIN AU3FN0019451): affirmed at ‘AAsf’; Outlook Stable AUD13.2m Class C notes (ISIN AU3FN0019469): affirmed at ‘Asf’; Outlook Stable AUD6.6m Class D notes (ISIN AU3FN0019477): affirmed at ‘BBBsf’; Outlook Stable AUD5.0m Class E notes (ISIN AU3FN0019485): affirmed at ‘BBsf’; Outlook Stable Flexi ABS Trust 2013-2 AUD95.6m Class A2 notes (ISIN AU3FN0020129): affirmed at ‘AAAsf’; Outlook Stable AUD20.7m Class B notes (ISIN AU3FN0020137): upgraded to ‘AA+sf’ from ‘AAsf’; Outlook Stable AUD9.2m Class C notes (ISIN AU3FN0020145): upgraded to ‘A+sf’ from ‘Asf’; Outlook Stable AUD6.9m Class D notes (ISIN AU3FN0020160): affirmed at ‘BBBsf’; Outlook Stable AUD4.6m Class E notes (ISIN AU3FN0020228): affirmed at ‘BBsf’; Outlook Stable Class A1 notes were paid in full in February 2014. A comparison of the transactions’ representations, warranties and enforcement mechanisms (RW&Es) to those of typical RW&Es for this asset class is available by accessing the reports and/or links given under Related Research below. Contacts: Lead Surveillance Analyst James Zanesi Director +61 2 8256 0306 Fitch Australia Pty Ltd Level 15, 77 King Street, Sydney, NSW 2000 Committee Chairperson Alison Ho Senior Director +61 2 8256 0350 Media Relations: Leni Vu, Sydney, Tel: +61 2 8256 0326, Email: leni.vu@fitchratings.com Media Relations: Leni Vu, Sydney, Tel: +61 2 8256 0326, Email: Leni.Vu@fitchratings.com. Additional information is available on www.fitchratings.com. The source of information used to assess these ratings was FlexiGroup Limited. The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public. Applicable criteria, “Global Structured Finance Rating Criteria”, dated 20 May 2014; “APAC Consumer ABS Rating Criteria”, dated 24 July 2013; “Counterparty Criteria for Structured Finance and Covered Bonds”, dated 14 May 2014; and “Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum”, dated 14 May 2014; are available at www.fitchratings.com. Related Research Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions — Amended Flexi ABS Trust 2012-1 Flexi ABS Trust 2012-1 – Appendix Flexi ABS Trust 2013-1 Flexi ABS Trust 2013-1 – Appendix Flexi ABS Trust 2013-2 Flexi ABS Trust 2013-2 – Appendix Applicable Criteria and Related Research: Global Structured Finance Rating Criteria here APAC Consumer ABS Rating Criteria here Counterparty Criteria for Structured Finance and Covered Bonds here Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum here Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions here Flexi ABS Trust 2012-1 here Flexi ABS Trust 2012-1 – Appendix here Flexi ABS Trust 2013-1 here Flexi ABS Trust 2013-1 – Appendix here Flexi ABS Trust 2013-2 here Flexi ABS Trust 2013-2 – Appendix here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S FREE WEB SITE AT 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. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises it to provide credit ratings to wholesale clients only. 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