Fitch Expects to Rate GE Dealer Floorplan Master Note Trust, Series 2012-4; Presale Issued
Fitch Ratings expects to rate GE Dealer Floorplan Master Note Trust, Series 2012-4 as follows:
--$400,000,000 class A notes 'AAAsf', Outlook Stable;
--$8,421,000 class B notes 'Asf', Outlook Stable;
--$12,631,000 class C notes 'BBBsf', Outlook Stable.
Fitch's stress and rating sensitivity analysis are discussed in the presale report titled 'GE Dealer Floorplan Master Note Trust, Series 2012-4', dated Nov. 1, 2012, which is available on Fitch's web site.
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 0.33% in August 2012, in line with historical levels. 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 at stable 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.
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 June 6, 2012.
Applicable Criteria and Related Research: GE Dealer Floorplan Master Note Trust, Series 2012-4
Global Rating Criteria for Dealer Floorplan ABS
Global Structured Finance Rating Criteria
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