Fitch Rates Hyundai Auto Lease Securitization Trust 2015-A

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings assigns the following ratings and Rating Outlooks to the asset-backed notes issued by Hyundai Auto Lease Securitization Trust 2015-A:

--Class A-1 asset-backed notes 'F1+sf';

--Class A-2 asset-backed notes 'AAAsf'; Outlook Stable;

--Class A-3 asset-backed notes 'AAAsf'; Outlook Stable;

--Class A-4 asset-backed notes 'AAAsf'; Outlook Stable;

--Class B asset-backed notes 'AAsf'; Outlook Stable.

KEY RATING DRIVERS

Stable Collateral Quality: The pool is consistent with that of recently issued HALST transactions, with a weighed average (WA) FICO score of 742 and seasoning of nine months. While there is a decrease in longer-term leases, the securitized residual (RV) has decreased to 63.26% of the securitization value (SV), and the pool exhibits a diversified mix of vehicle models.

Adequate Credit Enhancement (CE) Structure: Initial hard CE will be 16.95% and 13.50% for the class A and B notes, respectively, growing to 18.95% and 15.50% of the initial SV, consistent with past transactions. Initial excess spread is expected to be 3.62%. Loss coverage is adequate to support Fitch's 'AAAsf' and 'AAsf' stressed assumptions.

Moderating Loss Performance: Credit and residual losses on HCA's portfolio have begun to increase from low levels seen in 2010 and 2011, but remain well below peaks used to derive the base case. The increases resulted from rapid origination growth and a stabilizing wholesale used vehicle market. Fitch's credit loss proxy is 1.15% of the SV and 13.30% of the RV.

Stabilizing Wholesale Values: The U.S. wholesale vehicle market has remained strong in recent years. However, increasing off-lease vehicle supply and pressure from increased production levels is expected to lead to decreased residual realizations. Fitch has accounted for this in its RV loss analysis.

Experienced Origination/Underwriting/Servicing: Fitch believes HCA to be a capable originator, underwriter, and servicer, as evidenced by historical portfolio delinquency and loss experience and securitization performance.

Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of HCA would not impair the timeliness of payments on the securities.

RATING SENSITIVITIES

Unanticipated decreases in the value of returned vehicles and/or increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. This would likely result in declines of CE and loss coverage levels available to the notes. Hence, Fitch conducts sensitivity analyses by increasing the transaction's initial base case RV and credit loss assumptions and examining the rating implications on all classes of issued notes. The increases to the base case losses are applied such that they represent moderate (1.5x) and severe (2.5X) stresses, respectively, and are intended to provide an indication of the rating sensitivity of notes to unexpected deterioration of a trust's performance.

The presale report is available at 'www.fitchratings.com' or by clicking on the link.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (August 2014);

--'Criteria for Rating U.S. Auto Lease ABS' (April 2014);

--'Structured Finance Tranche Thickness Metrics' (July 2011).

Applicable Criteria and Related Research:

Hyundai Auto Lease Securitization Trust 2015-A -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863053

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Criteria for Rating U.S. Auto Lease ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=746763

Structured Finance Tranche Thickness Metrics

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646951

Hyundai Auto Lease Securitization Trust 2015-A (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862965

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=981137

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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 Ratings
Primary Analyst
Eugene Kushnir
Associate Director
+1-212-908-0830
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY, 10004
or
Secondary Analyst
Timothy McNally
Analyst
+1-212-908-0870
or
Committee Chairperson
Hylton Heard
Senior Director
+1-212-908-0214
or
Media Relations
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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