Enterprise Fleet Financing LLC $750.20 Million Notes Series 2017-1 Assigned Preliminary Ratings

Stocks and Financial Services Press Releases Friday January 20, 2017 09:10
NEW YORK--20 Jan--S&P Global Ratings
NEW YORK (S&P Global Ratings) Jan. 19, 2017--S&P Global Ratings today assigned its preliminary ratings to Enterprise Fleet Financing LLC's $750.20 million asset-backed notes series 2017-1 (see list).
The note issuance is an asset-backed securities transaction backed by a special unit of beneficial interest in lease contracts and underlying vehicles.
The preliminary ratings are based on information as of Jan. 19, 2017. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:

The availability of 8.63% initial hard credit support for the notes, which consists of overcollateralization of 7.63% of the initial pool balance and a cash reserve account of 1.00% of the initial pool balance. The overcollateralization is subject to a floor level of 2.54% of the initial pool balance. The cash reserve increases through trapping of excess spread to a target level equal to 1.65% of the initial pool balance and, if the cumulative charged-off lease ratio is less than 3.00% on the July 2017 payment date, releases to a floor level of 1.00% of the initial pool.

The availability of approximately 3.14% annual excess spread, on average, estimated on an expected, unstressed basis, including management fees.
The transaction's ability to withstand more than 5x our expected loss of 1.55%-1.75% under stressed cash flow modeling scenarios (including stresses on both excess spread and management fees).

The expectation that, under a moderate stress scenario of 2.0x our expected net loss level, the ratings on the class A notes will not decline by more than one rating category during the first year, all else being equal.

The characteristics of the amortizing pool being securitized, especially the high proportion (97.35%) of open-end lease contracts.
Enterprise Fleet Management Inc.'s ('BBB-/Positive') servicing experience, as well as its financial strength.
The transaction's legal structure.

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