Fitch Rates GE Dealer Floorplan Master Note Trust, Series 2013-1
CHICAGO -- April 30, 2013
Fitch rates GE Dealer Floorplan Master Note Trust, series 2013-1 as follows:
--$500,000,000 class A notes 'AAAsf'; Outlook Stable;
--$10,527,000 class B notes 'Asf'; Outlook Stable;
--$15,790,000 class C notes 'BBBsf'; Outlook Stable.
The issuance of the 2013-1 series is not expected to adversely impact the
performance of the outstanding series within the trust, which includes 2011-1,
2012-1, 2012-2, 2012-3, 2012-4 and any private series rated by Fitch.
KEY RATING DRIVERS
Diversified Trust: The trust currently comprises receivables associated with
approximately 2,000 manufacturers, 24,000 dealers, and 13 separate product
lines. GE DFMNT is classified as a category A trust under Fitch's criteria.
Strong Performance: GE DFMNT has experienced minimal net losses going back to
2004. The monthly trust default rate was 0.13% in January 2013. Monthly
payment rates (MPR), agings, and delinquencies are currently stable, having
steadily improved in the past couple years.
Improved Industry, Manufacturer, and Dealer Health: Although certain
industries/product lines have been slow to recover and some remain weak with
volatile monthly losses, the overall strength of the manufacturers and dealers
in the trust has stabilized. Trust performance metrics (MPR and losses) are
currently stable at historical levels.
Sufficient Credit Enhancement: Initial available credit enhancement for the
class A notes is 11.90%, consisting of 9.52% subordination, and a 2.38%
reserve (based on the initial collateral balance). The master trust contains a
dynamic seasonal early amortization three-month average MPR trigger and a
default rate trigger set at 5% (on a three-month average).
Consistent Origination and Servicing: GE Commercial Distribution Finance
Corporation (GE CDF) has demonstrated adequate abilities as an originator,
underwriter, and servicer, as evidenced by the historical delinquency and loss
performance of GE DFMNT.
Legal Structure Integrity: The legal structure of the transaction provides
that a bankruptcy of General Electric Capital Corporation (GECC) would not
impair the timeliness of payments on the securities.
To conduct rating sensitivity for the issued notes, under a category A DFP
platform, Fitch assumes portfolio default levels at 5%, 15%, and 25% and under
two recovery level scenarios of 50% and 30%. Fitch modeled 2013-1 with the
assumption that the above defaults have occurred, reflecting asset performance
in a stressed environment. Remaining expected loss levels were compared with
the stressed loss assumption grid commensurate with various rating levels.
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Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Rating Criteria for Dealer Floorplan ABS' dated Jan. 23, 2013;
--'Global Structured Finance Rating Criteria' dated June 6, 2012.
Applicable Criteria and Related Research
Global Rating Criteria for Dealer Floorplan ABS
Global Structured Finance Rating Criteria
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Juveria Mozaffar, +1 312-606-2335
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
Hylton Heard, +1 212-908-0214
Brad Sohl, +1 312-368-3127
Sandro Scenga, +1 212-908-0278
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