Fitch places Trust 18247-6 Credit Line on Rating Watch Negative.
Fitch Ratings has placed on Rating Watch Negative (RWN) the Trust 18247-6 Credit Line ratings 'BBB+sf' the long-term global scale rating and the '
The RWN reflects a heightened probability of a potential disruption on
RATING ACTIONS
Entity / Debt
Rating
Prior
UFN F18247-6 (2019)
UFN F18247-6 (2019)
LT
BBB+sf
Rating Watch On
BBB+sf
UFN F18247-6 (2019)
Natl LT
Rating Watch On
Page
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VIEW ADDITIONAL RATING DETAILS
Transaction Summary
The credit line represents a securitization of a dynamic pool of equipment lease contracts originated by
KEY RATING DRIVERS
Heightened Temporary Exposure to Commingling Risk: Although collections can be deposited in the MCT, mechanism which has recently proven to be effective under distressed scenarios to mitigate transaction's exposure to commingling risk, also transaction's collections can be received in UNIFIN accounts, which are then transferred to the MCT within three days according to the governing documents.
Any recurring or sustained delays in the transfer of funds collected by
Potential Servicing Disruption Increases Exposure to Payment Interruption Risk (PIR): The correct functioning of the MCT, which is shared by different
In the event of a delay or interruption of servicer reporting processes by
Delayed Reporting Could Lead to Rating Withdrawal: In order to correctly monitor and maintain the assigned ratings, Fitch expects to receive on a timely manner information regarding performance of the transaction's collateral as well as of
For its surveillance process it is also important that Fitch be informed on a timely manner of all material changes in the information provided and any potential material events. It is important to highlight that consistent delays in providing information as reasonably requested by Fitch, may lead to a rating withdrawal.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The RWN could be resolved resulting in a downgrade if Fitch perceives a material weakening or disruption in
A downgrade could also occur upon an increase of Fitch's assessment of the transaction's exposure to commingling risk or PIR.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Upgrades on the global scale rating are unlikely given the RWN on the transaction's rating. The national scale rating is already at the top of its scale and thus cannot be upgraded.
Best/Worst Case Rating Scenario
International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
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