OREANDA-NEWS. Fitch Ratings has affirmed three classes from FP Turbo 2014-1. The transaction is a securitisation of first-ranked Australian finance and operating vehicle leases receivables originated by Fleet Partners Pty Limited. The notes were issued by Perpetual Trustee Company Limited as trustee for the FP Turbo Series 2014-1 Trust. The ratings are as follows:

AUD74.8m Class A notes affirmed at 'AAAsf'; Outlook Stable
AUD16.6m Class B notes: affirmed at 'AAsf'; Outlook Stable
AUD11.4m Class C notes: affirmed at 'Asf'; Outlook Stable

KEY RATING DRIVERS
The rating actions reflect Fitch's view that sequential amortisation has resulted in a build-up of credit enhancement for the rated notes with credit enhancement nearly doubling since closing. The transaction has benefited from the performance of the underlying leases that have remained within the agency's expectations. Total net losses have been below Fitch's base cases to date and excess spread has been more than sufficient to cover any losses incurred.

At the end October 2015, the 30+days and 90+ day delinquency rates were 2.2% and 0.9% of the collateral pool, respectively. Cumulative net credit losses since closing were AUD1.27m, 0.47% of the original pool, below Fitch's expected losses. The majority of these losses were due to one customer being placed into receivership in mid-2015. Recoveries are still in the process of being received from lessee vehicle sales.

Residual value risk is present within the transaction with the inclusion of operating leases. Between closing and October 2015, sales proceeds achieved from operating lease vehicles returned saw proceeds of 107% of the residual position, above Fitch's base case of 94%. The transaction includes a vehicle servicing account to enable the issuer to fund vehicle servicing obligations. This account is maintained dynamically and at present is 3.9% of the pool balance, up from 3.4% at closing.

RATING SENSITIVITIES
The prospect of a downgrade is considered remote at present, given the expected performance of the pool, the adequate excess spread and subordination.

The transaction is currently amortising sequentially, resulting in a build-up of credit enhancement for the rated notes. A switch to pro-rata amortisation is expected, if there is sufficient build-up of subordination and performance triggers are met over the next 12 months.

Cumulative losses could increase over eight times to be in line with Fitch's expected losses at the 'AAAsf' scenario at this point in the life of the transaction.

Negative rating action would be considered if there was an unexpected increase in losses above expected levels that reduced excess spread and resulted in charge-offs. To date there have been no charge offs to any notes.

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

DATA ADEQUACY
Fitch conducted a file review of 10 sample lease files focusing on the underwriting procedures conducted by Fleet Partners Pty Limited compared to its credit policy at the time of underwriting. Fitch has checked the consistency and plausibility of the information and no material discrepancies were noted that would impact Fitch's rating analysis.

A comparison of the transaction's representations, warranties and enforcement mechanisms (RW&Es) to those of typical RW&Es for this asset class is available by accessing the reports and/or links given under Related Research below.