OREANDA-NEWS. Fitch Ratings has affirmed Globaldrive Auto Receivables 2014-A B.V.'s class A notes and upgraded the class B notes, as follows:

EUR394.9m class A notes (ISIN XS1059372455): affirmed at 'AAAsf'; Stable Outlook
EUR16.3m class A notes (ISIN XS1059373008): upgraded to 'AA+sf' from 'AAsf'; Stable Outlook

This transaction is a true-sale securitisation of German auto loans originated by FCE Bank plc (FCE Bank), acting through its German branch Ford Bank (FCE Germany). FCE Bank is is part of the Ford Motor Company group and operates in the European market through various branches.

KEY RATING DRIVERS
The rating actions reflect the transaction's stable performance, which is within Fitch's expectations. According to our calculations based on the investor report as of 28 February 2015, the observed cumulative default rate since closing in May 2014 is 0.15%, while the reported loss rate to date is 0.11%. Fitch's cumulative default and loss base case assumptions as of the reporting date are 0.18% and 0.06%, respectively. Accounts delinquent for more than 30 days make up 0.43% of the current portfolio balance. Fitch's outlook for the German economy is stable. Therefore, no significant performance deterioration in the transaction is expected, which is reflected in the Stable Outlook on the notes.

The transaction started amortising sequentially at closing, which has resulted in an increase in credit enhancement (CE) for the class A notes to 10.8% from 8.7% at closing. The class A notes' available CE comprises overcollateralisation from subordination of the class B and C notes (collectively 9.9%) and a non-amortising reserve fund, which provides an additional 0.9% of protection. For the class B notes, available CE has increased to 7.1% from the initial 5.7%. Only the unrated class C notes and the reserve fund provide protection for the class B notes. In addition, the class A and B notes benefit from substantial excess spread, which has been sufficient to cover realised losses to date.

The current pool composition is comparable to that at closing. Loan contracts backed by new cars represent about 73.6% of the portfolio, while the remaining loans are backed by used vehicles, including ex-demonstration cars. Due to the slower amortisation of contracts that include a balloon payment at maturity, the share of these balloon contracts has increased to 73.4% while the remainder of the current portfolio is represented by fully-amortising loans.

A commingling reserve was established and funded at the closing date. The reserve will be increased on the monthly payment date in October 2016 to address increasing commingling risk from balloon contracts, the majority of which become due in or after this month. Fitch determined that even without the scheduled increase of the reserve, the class A and B notes would be adequately protected against commingling risk, taking all structural features into consideration.

Deutsche Bank AG (A+/Negative/F1+) is the issuer's account bank while Lloyds Bank plc (A/Negative/F1) is the counterparty for a swap that hedges the fixed-rate and floating-rate mismatch between the assets and the notes. The transaction documentation contains remedial actions to be implemented should the account bank's or swap counterparty's credit quality deteriorate. However, the potential replacement of the account bank is conditional upon the servicer's decision, which in turn depends on its expectation about the effect of a non-replacement on the notes' ratings.

No back-up servicer was appointed at closing. Should a servicer replacement become necessary, the issuer corporate service provider and the trustee would assist the issuer in appointing a new servicer. In addition, the liquidity reserve fund would cover the issuer's senior expenses. Fitch deems these features adequate to support the notes' ratings.

RATING SENSITIVITIES
Fitch has maintained its lifetime default base case at 1.75%, and the recovery rate base case is unchanged at 70.0%. The unchanged expectations regarding defaults and recoveries lead to an unchanged lifetime loss base case expectation of 0.5%.

Expected impact upon the note rating of increased defaults and reduced recoveries (class A/B):
Current Rating: 'AAAsf'/'AA+sf'
Increase base case default by 25% and reduce base case recovery by 25%: 'AAAsf'/'AAsf'

The notes' rating is not sensitive to an isolated increase (reduction) of 25% in defaults (recoveries).