OREANDA-NEWS. Fitch Ratings has upgraded SCFI Rahoituspalvelut Ltd's class B notes and affirmed the others, as follows:

EUR 246.6m class A notes: affirmed at 'AAAsf'; Stable Outlook
EUR 43.5m class B notes: upgraded to'AA+sf' from 'AAsf'; Stable Outlook
EUR 6.7m class C notes: affirmed at 'A+sf'; Stable Outlook
EUR 7.2m class D notes: affirmed at 'Asf'; Stable Outlook
EUR 8.2m class E notes: affirmed at 'BB+sf'; Stable Outlook

The transaction is a securitisation of auto loan receivables originated to Finnish individuals and companies by Santander Consumer Finance Oy (SCF Oy, the seller), a 100% subsidiary of Norway-based Santander Consumer Bank AS (SCB), which is a 100% subsidiary of Santander Consumer Finance, S.A. (SCF, A-/Stable/F2).

The rating actions reflect that the underlying asset pool's performance has been in line with or better than Fitch's expectations, and credit enhancement (CE) has increased for all classes of notes. About 38% of the pool has amortised since closing. The remaining 62% pool composition hold similar characteristics to the initial pool. The proportion of balloon loans increased marginally, which is expected and reflected in Fitch's asset assumptions.

High Recoveries
The recoveries achieved by SCF Oy are among the highest for rated European auto ABS. Cumulative recoveries stand at 56%, which is consistent with expectations given the time horizon allowed for recoveries to take place.

Liquidity Coverage
A liquidity reserve provides liquidity coverage for the class A and B notes. Fitch has capped the rating on the class C notes at 'A+sf' as they do not benefit from this reserve and therefore timely payment of interest may not be achieved if there is a servicing disruption.

Cumulative defaults were 0.32% as of end of August 2015 data. This is in line with Fitch's expectation at this point in life of the transaction. Given the solid asset performance and substantial prepayments since closing, we have lowered the lifetime default rate base case to 1.75%.

Economic Outlook Factored In
Weak economic growth is adversely affecting the labour market. Unemployment has risen over the past year, standing at 9.7% in July, 1.0% higher than a year ago. We expect unemployment to average 9.5% this year before edging back to 8.8% by 2017. Although the economy has fared slightly worse than expected during the past year, the asset performance has held up well, and the revised base case reflects the economic outlook over the next 12-18 months.

Fitch revised its lifetime default base from 2% to 1.75%. Recoveries base case remained at 70%.

Expected impact upon the note rating of increased defaults (class A/B/C/D/E):
Current ratings: 'AAAsf'/'AA+sf'/'A+sf'/'Asf'/'BB+sf'
Increase base case defaults by 25%: 'AAAsf'/'AA+sf'/'A+sf'/'Asf'/'BB+sf'
Increase base case defaults by 50%: 'AAAsf'/'AA-sf'/'A+sf'/'A-sf'/'BB+sf'

Expected impact upon the note rating of reduced recoveries (class A/B/C/D/E):
Current Ratings: 'AAAsf'/'AA+sf'/'A+sf'/'Asf'/'BB+sf'
Reduce base case recovery by 50%: 'AAAsf'/'AA+sf'/'A+sf'/'Asf'/'BB+sf'

Expected impact upon the note rating of increased defaults and decreased recoveries (class A/B/C/D/E):
Current Ratings: 'AAAsf'/'AA+sf'/'A+sf'/'Asf'/'BB+sf'
Increase default base case by 10%; reduce recovery base case by 10%:
Increase default base case by 25%; reduce recovery base case by 25%:
Increase default base case by 50%; reduce recovery base case by 50%:

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

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.

The information below was used in the analysis.
Monthly investor reports provided by SCF Oy up to 31 August 2015 (September reporting date)

A comparison of the transaction's Representations, Warranties & Enforcement Mechanisms to those typical for the asset class is available by accessing the appendix that accompanies the initial new issue report (see SCFI Rahoituspalvelut Limited - Appendix, dated 6 November 2014 at www.fitchratings.com).