)--Fitch Ratings has affirmed the following classes of GreatAmerica Leasing Receivable Funding, LLC Series 2013-1 (GALR 2013-1):
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable;
--Class B at 'AAsf'; Outlook to Positive from Stable;
--Class C at 'Asf'; Outlook to Positive from Stable;KEY RATING DRIVERS
The affirmation of the notes represents loss coverage and enhancement levels consistent with each class' respective rating. The transaction has performed well to date with net losses projecting below Fitch's initial base case expectation.
The Positive Outlook for the Class B and C Notes reflect the possibility for positive rating actions in the next 12 to 18 months as losses are tracking inside of initial expectations and credit support is expected to increase. Fitch will continue to monitor this transaction and may take additional rating actions in the event of changes in performance and credit enhancement measures.RATING SENSITIVITY
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxy which would impact available loss coverage. Lower loss 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 1.5x and 2.5x higher of Fitch's base case loss expectations. Initial key rating drivers and rating sensitivities are further described in the new issue report published on Feb. 4, 2013.
To date, the transaction has exhibited strong performance with losses well within Fitch's initial expectations with rising loss coverage and multiple levels. As such, continued strong performance for this transaction would most likely result in further positive rating actions. Conversely, a material deterioration in performance would need to occur within the asset pool to have potential negative impact on the outstanding ratings.
Fitch's analysis of the Representations and Warranties (R&W) of this transaction can be found in 'GreatAmerica Leasing Receivables Funding, L.L.C Series 2013-1 — 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 April 17, 2012.Contacts:
Thomas Kaiser, CPA, Analyst
Fitch Ratings, Inc.
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