Fitch Maintains RWN on Class E Note Flexi ABS 2013-1

(The following statement was released by the rating agency)SYDNEY, July 03 (Fitch) Fitch Ratings has maintained the Rating Watch Negative (RWN) on Flexi ABS Trust 2013-1's (Flexi 2013-1) Class E notes, as the reconciliation of disputed payments between Flexirent Capital Pty Ltd (Flexi) and one of the main vendors to the transaction, who acts as an introducer of receivables, progressed but was not completed by the expected date of 30 June 2016.The transactions are backed by unsecured commercial lease receivables originated by Flexi. The notes were issued by Perpetual Corporate Trust Limited in its capacity as trustee of the transaction.The rating actions are as listed below: AUD1.5m Class E notes (ISIN AU3FN0019485) 'BBBsf'; remains on RWN KEY RATING DRIVERSA substantial portion of the pool remains in arrears due to the disputed calculations. Flexi 2013-1's 30+ day arrears were 16.8% and 90+ day arrears were 9.2% at 30 May 2016. Fitch expects arrears to fall as the reconciliation process progresses. Removing the effect of the disputed loans, 30+ arrears were low at 2.0%. Losses were also low, at 3.6% of the original pool, but Fitch expects losses to rise as write-offs from the dispute are realised. When the reconciliation is completed, the relevant party will make the required payment to the trust. Flexi expects the reconciliation to be completed by 30 September 2016, at the earliest. Fitch expects to resolve the RWN at the end of this period.RATING SENSITIVITIESFlexi 2013-1 is currently paying sequentially, as the arrears trigger was breached. This is resulting in a significant build-up of subordination. Fitch may downgrade the class E Flexi 2013-1 notes by up to one category if the resolution results in a significant loss.DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating actionDATA ADEQUACY Fitch conducted a file review of 10 sample loan files, focusing on the underwriting procedures conducted by Flexi compared to its credit policy at the time of underwriting. Fitch 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.Contacts: Lead Surveillance AnalystKatie BrookesAnalyst+612 82560 364Fitch Australia Pty Ltd. Level 15, 77 King St, Sydney, NSW 2000, AustraliaCommittee Chairperson Natasha VojvodicSenior DirectorPhone +612 8256 0350Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com.Additional information is available at www.fitchratings.comSources of Information:The source of information used to assess these ratings was Flexi. 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. 14 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum (pub. 14 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744175Global 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 Flexi ABS Trust 2013-1 https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=711321Flexi ABS Trust 2013-1 - Appendix https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=711323Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions (Applicable to Transactions Rated from Sept.26, 2011 until June 15, 2015) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863817Additional Disclosures Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1008399Endorsement 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. 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