Fitch Ratings has affirmed two classes of notes from Eclipx Turbo Series 2017-1 Trust's automotive lease-backed floating-rate notes.

The transactions are securitisations of first-ranking Australian operating, financing and novated lease receivables originated by FleetPartners Pty Limited, which forms part of the Eclipx Group Limited. The notes were issued by Perpetual Trustee Company Limited as trustee for the trust.

The social and market disruption caused by the coronavirus and the related containment measures did not negatively affect the ratings because there is sufficient credit enhancement to offset the effects under Fitch's base-case scenario and adequate liquidity to support the current ratings.

The Stable Outlook is based on the notes' liquidity support and ability to withstand the sensitivity to higher defaults and lower recoveries stemming from the pandemic.

RATING ACTIONS

ENTITY/DEBT	RATING		PRIOR

Eclipx Turbo Series 2017-1 Trust

A2 AU3FN0039343

LT	AAAsf 	Affirmed		AAAsf

B AU3FN0039350

LT	AAAsf 	Affirmed		AAAsf

VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Coronavirus-Related Economic Shock: Fitch has made assumptions about the spread of the coronavirus and the economic impact of the related containment measures. Under our base-case (most likely) scenario, Fitch assumes a global recession in 1H20 driven by sharp economic contractions in major economies with a rapid spike in unemployment, followed by a solid recovery that begins in 3Q20 as the health crisis subsides. Fitch's baseline scenario for Australia includes GDP shrinking by 2.7% in 2020 with unemployment rising to an annual average of 7.1%, which would result in material deterioration of asset performance. This deterioration in macroeconomic conditions will be partly offset by a low official cash rate of 0.25% and stimulus measures from the central bank and government. Fitch's downside (sensitivity) scenario in the rating sensitivities section below considers a more severe and prolonged period of stress, with recovery to pre-crisis GDP levels delayed until around the middle of the decade.

Coronavirus-Related Impact: The measures put in place to limit the virus spread are affecting Australia's economy, with many businesses continuing to experience a decline in income. We expect these measures to affect loan performance and this has been factored into our revised base-case assumptions.

Commentary describing our credit views and analytical approach as a consequence of the coronavirus is available in the following reports:

'Global Economic Outlook: June 2020 - Coronavirus Disruption Easing', available at www.fitchratings.com/site/re/10127783

'Fitch Ratings Coronavirus Scenarios: Baseline and Downside Cases-Update', available at www.fitchratings.com/site/re/10120570

'Global SF Rating Assumptions Updated to Reflect Coronavirus Risk', available at www.fitchratings.com/site/pr/10117224

Liquidity Risk: We have reviewed the ability of the transaction to survive a significant proportion of borrowers being offered, and taking up, a payment holiday. The transaction can withstand more than 95% of the portfolio in delinquency or receiving payment holidays before needing to draw upon liquidity support. This is well above the current balance of loans under payment deferral as a portion of the total transaction (0.6% at end-June 2020). In addition, the transaction benefits from a reserve sized at 2.0% of invested note balance. The reserve would be able to cover the entire portfolio with a payment holiday for 10 months.

Portfolio Analysis: The portfolio consisted of 3,197 contracts equating to approximately AUD79.8 million at end-June 2020. The average contract balance was AUD24,967. The portfolio consists of operating and finance lease contracts to obligors across a range of industries. The underlying obligors are predominantly large corporates (93.1%) and the collateral consists of mostly passenger vehicles (39.8%) with smaller portions of light commercial vehicles (26.1%), heavy commercial vehicles (21.5%) and auto and other equipment (12.6%). The portfolio is further diversified across geographical locations with no particular concentration in any one state, territory or industry.

The portfolio has exhibited no signs of performance deterioration; as at end-June 2020, 30+ and 60+ days' arrears were 0.6% and 0.3%, respectively, lower than Fitch's 1Q20 ABS Dinkum Index of 2.3% and 1.1%, respectively. The portfolio has experienced defaults resulting in life to date net loss of AUD169,234, or 0.05% of the original portfolio balance, which have been covered by excess spread. This is below Fitch's initial base-case assumptions. The strong performance observed is partially attributable to the predominantly corporate obligor pool (93.1%), and the small exposure to industries significantly affected by the pandemic, with retail trade forming 3.3% of the total outstanding balance of the portfolio and accommodation and food services forming 0.5% the total outstanding balance.

Fitch took into consideration the historical performance of the portfolio in reviewing the base-case assumptions, as well as expectations of the performance of the receivables as a result of the deterioration of macroeconomic conditions in Australia due to the coronavirus pandemic. The base-case default rates were increased by 3.9x as a result. The revised assumptions resulted in no impact on the existing rating as the credit enhancement available to the 'AAAsf' rated class A2 and B notes is sufficient to withstand the expected worsened performance.

Obligor Concentration: The pool's largest 10 obligors account for 4.2% of the current portfolio. The relative concentration of the portfolio has been taken into consideration in Fitch's derivation of default assumptions while considering lessee concentrations and correlation risks, in line with the SME Balance Sheet Securitisation Rating Criteria.

Residual Value Risk: The weighted-average current residual value on the operating lease portfolio is 50.34%. The proceeds realised on disposal of the underlying assets have been stable in the last 12 months and have exceeded the base-case assumptions set at the inception of the transaction. The performance of the residual value has been underpinned by stronger demand than we expected for second-hand cars.

Servicer, Operational Risks: All assets were originated by FleetPartners, which demonstrates adequate capability as originator, underwriter and servicer, evident from the historical delinquency and performance of existing securitised trusts. Fitch undertook an onsite operational review and found that the operations of the originator and servicer were comparable with other auto and equipment lenders.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

The class A2 and B notes are rated at 'AAAsf', which is the highest level on Fitch's scale. The ratings cannot be upgraded.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

A longer pandemic than Fitch expects that leads to deterioration in macroeconomic fundamentals and consumers' financial position in Australia beyond Fitch's baseline scenario. Credit enhancement cannot compensate for the higher credit losses and cash flow stresses, all else being equal. Fitch conducted a sensitivity analysis by increasing gross default levels and decreasing recovery rates over the life of the transaction.

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.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information as part of its ongoing monitoring.

As part of its ongoing monitoring, Fitch conducted a review of a small targeted sample of FleetPartners' origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio.

Overall, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.

Additional information is available on www.fitchratings.com

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