Fitch Ratings expects to rate GE Dealer Floorplan Master Note Trust (GE DFMNT), series 2012-2 as detailed below.
Fitch's stress and rating sensitivity analysis are discussed in the presale report titled 'GE Dealer Floorplan Master Note Trust, Series 2012-2', dated May 8, 2012, which is available on Fitch's web site.
Fitch expects to assign the following ratings:
--$750,000,000 class A notes 'AAAsf', Outlook Stable;
-- $15,790,000 class B notes 'Asf', Outlook Stable; and
-- $23,684,000 class C notes 'BBBsf', Outlook Stable.
KEY RATING DRIVERS
Diversified Trust: The trust currently comprises receivables associated with approximately 2,200 manufacturers, 26,000 dealers, and 13 separate product lines. GE DFMNT is classified as a Category A trust under Fitch's criteria.
Strong Performance: GE DFMNT experienced minimal net losses going back to 2004. Monthly defaults were 0.35% in March 2012, in line with historical levels. Monthly payment rates (MPR), agings, and delinquencies are stable having steadily improved in the past couple of years.
Improved Industry, Manufacturer, and Dealer Health: Although certain industries/product lines have been slow to recover since early 2010 and remain weak with volatile monthly losses, the overall strength of the manufacturers and dealers in the trust has stabilized.
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 (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 GE Capital Corporation (GECC) would not impair the timeliness of payments on the securities.
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 Rating Criteria for Dealer Floorplan ABS' dated Jan. 25, 2012;
--'Global Structured Finance Rating Criteria' dated Aug. 4, 2011.
Applicable Criteria and Related Research: GE Dealer Floorplan Master
Note Trust, Series 2012-2 (US ABS)
Global Rating Criteria for Dealer Floorplan ABS
Global Structured Finance Rating Criteria
Sean Egeran, CFA, +1-212-908-0621
One State Street Plaza
New York, NY 10004
Hylton Heard, +1-212-908-0214
Du Trieu, +1-312-368-2091
Sandro Scenga, +1-212-908-0278