Fitch Ratings has taken rating actions on the following CNH Equipment Trusts:
2007-B
--Class A-3a, A-3b, and A-4 affirmed at 'AAA'/Outlook Stable;
--Class B affirmed at 'A'; Outlook Stable.
2007-C
--Class A-3a, A-3b, A-4a, and A-4b affirmed at 'AAA'; Outlook Stable;
--Class B affirmed at 'A', Outlook revised to Stable from Negative.
2008-A
--Class A-3, A-4a, and A-4b affirmed at 'AAA'; Outlook Stable;
--Class B affirmed at 'A'; Outlook Stable.
2008-B
--Class A-3a, A-3b, A-4a, and A-4b affirmed at 'AAA'; Outlook Stable;
--Class B affirmed at 'A'; Outlook Stable.
The rating actions reflect the cash injection provided by the depositor, CNH Capital Receivables LLC, to the reserve accounts in the aforementioned four transactions. The cash addition is viewed as a positive by Fitch as it increases available credit support for the outstanding notes. The increase in credit support was provided via the reserve account ($17.0 million) in the 2006-A transaction, which was redeemed under its 10% optional clean up call on the February 2010 payment date. The funds were then distributed to the respective outstanding reserve accounts. Specifically, the 2007-B, 2007-C, 2008-A, and 2008-B transactions received a deposit of $4.8 million, $5.5 million, $3.3 million, and $3.4 million in their respective reserve accounts.
As part of its analysis, Fitch reviewed performance within the transactions and assessed the impact of the increased credit enhancement levels. The transactions have been experiencing a higher loss pace relative to prior CNH issuances due to poorer performing construction sector contracts. Construction contracts, which represent approximately 20%-25% of the initial pools but 75%-80% of cumulative net losses on liquidated receivables, have been adversely impacted by the continued downturn of the real estate sector. However, despite the higher level of losses, significant amortization and credit enhancement build has provided adequate loss coverage to date, which has been commensurate with current rating levels. The additional support further improves current coverage levels for the outstanding notes.
The outlook revision on the class B note in the 2007-C transaction reflects Fitch's assessment of the reserve account increase on current coverage levels. The transaction has experienced the highest level of losses to date relative to prior CNH issuances and, as a result, has experienced repeated draws on the reserve account. With the additional $5.5 million cash deposit, Fitch believes the class B note can now sustain a higher level of stressed losses consistent with its current rating level.
Fitch will continue to closely monitor these transactions and may take additional rating action in the event of changes in performance and credit enhancement measures.
These ratings reflect the application of Fitch's current criteria which are available on Fitch's web site at www.fitchratings.com and specifically include:
--'Rating Criteria for U.S. Equipment Lease and Loan Securitizations' dated June 16, 2008;
--'Global Structured Finance Rating Criteria' dated Sept. 30, 2009.
Additional information is available at www.fitchratings.com.
ALL 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 PUBLIC WEBSITE 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.
Contacts:
Fitch Ratings, Chicago
Juveria Mozaffar, +1-312-606-2335
Du
Trieu, +1-312-368-2091
or
Brian Bertsch, +1-212-908-0549
(Media
Relations, New York)
brian.bertsch@fitchratings.com
Cindy
Stoller, +1-212-908-0526
(Media Relations, New York)
cindy.stoller@fitchratings.com