Fitch Ratings expects to assign the following ratings to the GreatAmerica Leasing Receivables Funding Series 2016-1 notes:
Fitch’s stress and rating sensitivity analysis are discussed in the presale report titled GreatAmerica Leasing Receivables Funding Series 2016-1′, dated February 4, 2016, which is available on Fitch’s web site. The presale report details how Fitch addresses the key rating drivers summarized below.
Key Rating Drivers
High Concentration of Copiers/Printers: 67% of 2016-1 consists of office imaging (copier/printers), which is down from the prior five transactions that included 67%-76% of this collateral type. Despite the high concentration, copiers/printers have historically performed better than other equipment types within GreatAmerica’s portfolio.
Improving Asset Performance: GreatAmerica’s managed static pool data have experienced improved loss performance for more recent vintages of the managed portfolio. All GreatAmerica securitizations have experienced cumulative net losses within Fitch’s initial expectations for each transaction.
Sufficient Credit Enhancement: All classes benefit from a cash reserve account and overcollateralization (OC). Total initial hard credit enhancement for the class A, B and C notes is 12.30%, 8.50% and 5.75%, respectively. These levels are down from 2015-1 and 2014-1. Additionally, all classes benefit from 6.17% in booked residuals. The structure is able to support Fitch’s base case CNL of 2.55%.
Quality of Origination, Underwriting and Servicing: GreatAmerica has demonstrated adequate abilities as originator, underwriter and servicer as evidenced by historical delinquency and loss performance of securitized trusts and the managed portfolio.
Integrity of Legal Structure: The legal structure of the transaction should provide that a bankruptcy of GreatAmerica would not impair the timeliness of payments on the securities.
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