(The following statement was released by the rating agency)SYDNEY, August 16 (Fitch)
Fitch Ratings has affirmed two classes of notes issued by Nifty Warehouse Trust No.4. The transaction is backed by a pool of Australian auto receivables originated by Nissan Financial Services Australia Pty Ltd (NFSA), and issued by Perpetual Trustee Company Limited in its capacity as trustee of Nifty Warehouse Trust No. 4.
The rating actions are listed below:AUD350m Class A1 notes affirmed at 'AAsf'; Outlook Stable; and AUD150m Class A2 notes affirmed at 'AAsf'; Outlook Stable.
KEY RATING DRIVERS
The affirmations reflect Fitch's view that available credit enhancement supports the notes at their current ratings, the agency's expectations of Australia's economic conditions, and that the credit quality and performance of the underlying loans have remained within the agency's expectations.Under Fitch's counterparty criteria, the swap provider is now an eligible counterparty for 'AAAsf' rated notes. However, the class A1 and A2 notes were not upgraded due the absence of collateral posting provisions in the transaction documents, which is viewed as a credit negative under Fitch's updated counterparty criteria. In Fitch's view, provisions to allow for collateral to be posted, in the event of a downgrade of the swap provider, are a key remedial factor to address counterparties' credit-quality deterioration.
Portfolio parameters ensure the revolving pool maintains a diverse and granular mix of asset characteristics, and is geographically distributed across Australia. Excess concentration triggers are in place to mitigate risk of excessive concentration of specific asset characteristics and to maintain a well-balanced portfolio.Gross losses and net losses have tracked below Fitch's base case to date, and excess spread has been more than sufficient to cover all losses experienced by the trust.
RATING SENSITIVITIES
The prospect of downgrades is considered remote at present given the pool's expected performance, and the existence of adequate excess spread and subordination.If collateral postings provisions are incorporated into the transaction documents, the notes will be upgraded to 'AAAsf'.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10 Form ABS
Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool was not prepared for this transaction because it does not involve the use of offering documents. For further information, please see Fitch's Special Report titled "Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions," dated 31 May 2016.
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the information it has received about the performance of the underlying pools and the transactions. There were no findings that were material to this analysis.Contacts: Lead Surveillance Analyst Hai Duong Le Associate Director+61 2 8256 0358 Fitch Australia Pty Ltd. Level 15, 77 King St, Sydney, NSW 2000, Australia Committee Chairperson Natasha Vojvodic Senior Director+612 8256 0350Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com.
Additional information is available at www.fitchratings.com.Sources of Information:The source of information used to assess these ratings was NFSA. The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public.Applicable Criteria Counterparty Criteria for Structured Finance and Covered Bonds (pub. 18 Jul 2016)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884963Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum (pub. 18 Jul 2016)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884964Global Consumer ABS Rating Criteria (pub. 03 Dec 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874105Global Structured Finance Rating Criteria (pub. 27 Jun 2016)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=883130Related Research Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=882358Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr _id=1010415Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1010415Endorsement Policy https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&det ail=31ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S FREE WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.