OREANDA-NEWS. Fitch Ratings has upgraded Scandinavian Consumer Loans III's class B and C notes and affirmed the class A notes, as follows:

SEK565.2m class A notes: affirmed at 'AAAsf'; Stable Outlook
SEK96m class B notes: upgraded to 'AAAsf' from 'AAsf'; Stable Outlook
SEK193m class C notes: upgraded to 'A+sf' from 'Asf'; Stable Outlook
SEK560m class D notes: not rated

The transaction is a securitisation of unsecured consumer loans to Swedish individuals, originated by Nordax Bank AB. The transaction featured an initial revolving period of 36 months, which ended in December 2014. A step-up in the note margins is due in December 2015.

KEY RATING DRIVERS
The upgrade on the class B and C notes reflects the combined effect of increased credit enhancement and the transaction performing in line with Fitch's expectations.

Delinquencies of 30+ days past due have been under 2% since closing and are currently 1.7%, which is in line with their average value over the last 12 months. Cumulative defaults are 6.74% and are performing accordingly with our expectations. The transaction has benefited from high levels of excess spread, which has been sufficient to cover all losses.

Since the end of the revolving period, credit enhancement has increased for all rated classes of notes mainly due to the amortisation of the class A notes. Credit enhancement for the class A, class B and class C notes is currently at 69.1%, 62.9% and 50.6% respectively. Credit enhancement is also provided by a credit enhancement reserve and a liquidity reserve. Following the step-up date in December 2015, there is no requirement to retain the credit enhancement reserve at the required amount.

On the step-up date, the margin on all classes of notes will double, which will decrease the available excess spread. After the step-up date, available excess spread can be used to repay the notes sequentially according to the revenue priority of payments.

Fitch's lifetime default and recoveries base cases remain unchanged at 11.5% and 50% respectively.

RATING SENSITIVITIES
Expected impact on the note rating of increased defaults (class A/B/C)
Current ratings: 'AAAsf'/'AAAsf'/'A+sf'
Increase base case defaults by 50%: 'AAAsf'/'AAAsf'/'A+sf'

Expected impact on the note rating of reduced recoveries (class A/B/C)
Current ratings: 'AAAsf'/'AAAsf'/'A+sf'
Reduce base case recovery by 50%: 'AAAsf'/'AAAsf'/'A+sf'

Expected impact on the note rating of increased defaults and reduced recoveries (class A/B/C):
Current ratings: 'AAAsf'/'AAAsf'/'A+sf'
Increase default base case by 25%; reduce recovery base case by 25%: 'AAAsf'/'AAAsf'/'A+sf'
Increase default base case by 50%; reduce recovery base case by 50%: 'AAAsf'/'AA+sf'/'A+sf'

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed 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 pool and the transaction. 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 or conducted a review of origination files as part of its ongoing monitoring.

Prior to the transaction closing, Fitch reviewed the results of a third party assessment conducted on the asset portfolio information, which indicated no adverse findings material to the rating analysis.

Prior to the transaction closing, Fitch conducted a review of a small targeted sample of the 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 information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable

SOURCES OF INFORMATION
The information below was used in the analysis.
-Monthly investor reports provided by Nordax Bank AB up to October 2015.