Fitch Rates Volkswagen Auto Loan Enhanced Trust 2013-1

  Fitch Rates Volkswagen Auto Loan Enhanced Trust 2013-1

Business Wire

CHICAGO -- February 27, 2013

Fitch Ratings has assigned 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 a 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
expectation.

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
securitization performance.

RATING SENSITIVITY

Unanticipated increases in the frequency of defaults and loss severity on
defaulted receivables could produce loss levels higher than the base case and
could result in potential rating actions on the notes. Fitch evaluated the
sensitivity of the ratings assigned to VALET 2013-1 to increased credit losses
over the life of the transaction. Fitch's analysis found that the transaction
displays some sensitivity to increased defaults and credit losses, showing a
potential downgrade of one category under Fitch's moderate (1.5x base case
loss) scenario. The notes could experience downgrades of up to three rating
categories, although still remaining investment grade, under Fitch's severe
(2.5x base case loss) scenario.

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

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

U.S. Auto Lease ABS (Performance Snapshot)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649891

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Contact:

Fitch Ratings
Primary Analyst
Margaret Rowe
Director
+1-312-368-3167
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Bradley Sohl
Senior Director
+1-312-368-3127
or
Committee Chairperson
Du Trieu
Senior Director
+1-312-368-3167
or
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com
 
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