Fitch Rates RenewFund Receivables Trust 2015-1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings assigns the following rating to the RenewFund Receivables Trust 2015-1 notes:

--$12,580,000 3.51% asset backed notes 'Asf', Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of loans primarily originated by AFC First Financial Corporation through The WHEEL and Keystone Help programs, the latter of which is sponsored by the Pennsylvania State Treasury. The underlying collateral are five- or 10-year term low-rate loans to help make affordable energy efficiency home improvements. The weighted average FICO of the pool is 749 with an average loan balance of $7,554.

Sufficient Credit Enhancement (CE): CE supporting the notes is provided by overcollateralization (OC) and excess spread provided by a Yield Supplement Account (YSA). The initial OC amount (principal receivables less note balance) is projected to be 20.3%, or $3,208,382 as of the cutoff date. Fitch deems this satisfactory based on various stressed cash flow runs.

Adequate Liquidity Support: Liquidity support is provided by the Reserve Fund and YSA. The Reserve Fund will be funded at closing at $157,884, and maintain 1% of the initial pool balance. The YSA will be funded at closing to $2,411,370, and on each distribution date, cash will be drawn from the YSA and added to the collection fund in an amount that would increase the yield of the loans from their contractual rate to 8.50%. No additional cash will be deposited to the YSA after closing.

Acceptable Servicing Capabilities: RenewFund Finance LLC will act as Master Servicer to the loans, with AFC First Financial Corporation acting as day-to-day servicer. Wells Fargo Bank, NA is the Backup Servicer for the trust, and would step in to perform the duties of RenewFund Finance LLC or AFC First Financial Corporation should either be terminated as Master Servicer or Servicer, respectively.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults or charge-offs on customer accounts could produce loss levels higher than the base case and would likely result in declines of CE and remaining loss coverage levels available to the investments. Decreased CE may make certain ratings on the investments susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Hence, Fitch conducts sensitivity analysis by stressing a transaction's initial base case charge-off assumption by 1.5x, 2.0x, and 2.5x and examining the rating implications. The 1.5x, 2.0x, and 2.5x increase of the base case charge-offs are intended to provide an indication of the rating sensitivity of the notes to unexpected deterioration of a transaction's performance.

During the sensitivity analysis, Fitch examines the magnitude of the multiplier compression by projecting the expected cash flows and loss coverage levels over the life of investments under higher than the initial base case charge-off assumptions. Fitch models cash flows with the revised charge-off estimates while holding constant all other modeling assumptions.

Under the 1.5x base case stress scenario, the multiple for the investments compresses from the initial level to 1.95x-2.05x, corresponding to a one-category downgrade. Under the 2.0x base case stress scenario, the multiple for the investments compresses from the initial level to 1.45x-2.05x, corresponding to a two-category downgrade. Under the 2.5x base case stress scenario, the multiple for the investments compresses from the initial level to 1.15x-1.25x, corresponding to a two-category downgrade.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at www.fitchratings.com.

Applicable Criteria

EMEA Consumer ABS Rating Criteria (pub. 24 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750766

Rating Criteria for US Auto Loan ABS (pub. 10 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863979

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=986434

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=986434

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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View source version on businesswire.com: http://www.businesswire.com/news/home/20150615006414/en/

Fitch Ratings
Primary Analyst
Harry Kohl
Associate Director
+1-212-908-0837
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Tracy Wan
Senior Director
+1-212-908-9171
or
Committee Chairperson
Rodney Pelletier
Managing Director
+1-212-908-0625
or
Media Relations:
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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