Fitch Expects to Rate Volkswagen Auto Loan Enhanced Trust 2013-1; Presale
CHICAGO -- February 19, 2013
Fitch Ratings expects to assign the following ratings and Rating Outlooks to
the notes issued by Volkswagen Auto Loan Enhanced Trust (VALET) 2013-1:
--Class A-1 asset-backed notes 'F1+sf';
--Class A-2 asset-backed notes 'AAAsf'; Outlook Stable;
--Class A-3 asset-backed notes 'AAAsf'; Outlook Stable;
--Class A-4 asset-backed notes 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
STRONG COLLATERAL QUALITY: The weighted average (WA) FICO of 763 is consistent
with recently issued VALET transactions and, combined with the strong internal
credit tier distribution, indicates a strong borrower. However, the pool
contains an higher concentration of extended term loans, which have
experienced greater losses historically.
SUFFICIENT CREDIT ENHANCEMENT (CE): 2013-1 incorporates a sequential-pay
structure. Initial CE is 3.10% of the initial adjusted pool balance, growing
to 3.50% of the initial securitization value. Annual excess spread is expected
to be 1.81%. CE is sufficient to cover Fitch's 'AAAsf' stressed loss
STRONG PORTFOLIO/SECURITIZATION PERFORMANCE: Losses and delinquency levels on
VCI's portfolio and prior securitizations have improved dramatically from peak
levels in 2007 and 2008 and stabilized at lower levels.
UNSTABLE ECONOMIC OUTLOOK: A slower recovery and potential for volatility
could affect delinquencies and losses. Fitch's analysis accounts for this risk
by including poorer performing vintages from the recent recession in the base
case loss analysis.
LEGAL STRUCTURE INTEGRITY: The legal structure of the transaction should
provide that a bankruptcy of VCI would not impair the timeliness of payments
on the securities.
STABLE ORIGINATION/UNDERWRITING/SERVICING: Fitch believes VCI to be a capable
originator, underwriter, and servicer. These capabilities are further
evidenced by historical portfolio delinquency and loss experience and
The presale report is available to all investors on Fitch's website at
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Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Criteria for Rating US Auto Loan ABS' (April 16, 2012).
Applicable Criteria and Related Research: Volkswagen Auto Loan Enhanced Trust
2013-1 (US ABS)
Global Structured Finance Rating Criteria
Criteria for Rating U.S. Auto Lease ABS
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Margaret Rowe, +1-312-368-3167
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
Bradley Sohl, +1-312-368-3127
Du Trieu, +1-312-368-3167
Sandro Scenga, New York, +1 212-908-0278
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