Fitch Affirms OSCAR US 2017-2 at 'AAAsf'; Outlook Stable

Orient

28/08/2018 08:35

(The following statement was released by the rating agency)


Fitch Ratings-Tokyo-August 28: Fitch Ratings has affirmed all classes of notes 
of OSCAR US Funding VII LLC. The transaction is ultimately backed by a pool of 
auto-loan receivables originated by Orient Corporation in Japan. The rating 
actions are as follows:

USD64.0 million Class A-2a notes affirmed at 'AAAsf'; Outlook Stable

USD64.6 million Class A-2b notes affirmed at 'AAAsf'; Outlook Stable

USD92.1 million Class A-3 notes affirmed at 'AAAsf'; Outlook Stable

USD85.7 million Class A-4 notes affirmed at 'AAAsf'; Outlook Stable

Class A-1 notes were paid in full in April 2018

(Balances as of 27 August 2018)

KEY RATING DRIVERS

The rating affirmations for the notes reflect Fitch's view that the available 
credit enhancement (CE) is sufficient to support the current rating levels. Due 
to ongoing repayment, CE has increased for all notes since closing. Stable 
excess spreads available in the trust interest distribution provide additional 
credit support to the transaction.

The performance of the underlying auto loans has been stable and in line with 
Fitch's initial base-case assumptions. 

The cash flow model was not re-run for this rating action, as the underlying 
auto loans have performed within Fitch's expectations.

RATING SENSITIVITIES 

An unexpected significant increase in default rates could result in negative 
rating action on the notes. However, given the stable asset performance and 
sufficient credit enhancement, the prospect of downgrade is considered remote at 
present.

A foreign-currency note can exceed the country ceiling of the country of the 
assets or the issuer by up to four notches if transfer and convertibility risk 
is mitigated in the transaction structure. Japan's Country Ceiling is currently 
'AA'. A downgrade of the Country Ceiling to 'A' or lower would result in a 
downgrade of the notes.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10 

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in 
relation to this rating action.

DATA ADEQUACY 

Fitch has checked the consistency and plausibility of the information it has 
received about the performance of the asset pool and the transaction. There were 
no findings that were material to this analysis. Fitch has not reviewed the 
results of any third-party assessment of the asset portfolio as part of its 
ongoing monitoring.

Overall, Fitch's assessment of the asset-pool information relied upon for the 
agency's rating analysis according to its applicable rating methodologies 
indicates that it is adequately reliable.

SOURCES OF INFORMATION

Servicer reports provided by Orient Corporation and Mizuho Trust & Banking Co., 
Ltd. as of July 2018

Trustee reports provided by Mizuho Trust & Banking Co., Ltd. as of July 2018 

Monthly reports provided by U.S. Bank National Association as of August 2018 

Contacts: 

Lead Surveillance Analyst

Hitoshi Hibino

Associate Director

+81 3 3288 2631

Fitch Ratings Japan Limited

Kojimachi Crystal City East Wing 3rd Floor

4-8 Kojimachi, Chiyoda-ku

Tokyo 102-0083

Committee Chairperson 

Atsushi Kuroda

Senior Director

+81 3 3288 2692

Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935 , Email: 
wailun.wan@fitchratings.com.

Additional information is available on www.fitchratings.com

Applicable Criteria 

Consumer ABS Rating Criteria (pub. 11 Dec 2017)

https://www.fitchratings.com/site/re/907089

Global Structured Finance Rating Criteria (pub. 15 May 2018)

https://www.fitchratings.com/site/re/10029600

Structured Finance and Covered Bonds Counterparty Rating Criteria (pub. 01 Aug 
2018)

https://www.fitchratings.com/site/re/10039504

Structured Finance and Covered Bonds Counterparty Rating Criteria: Derivative 
Addendum (pub. 01 Aug 2018)

https://www.fitchratings.com/site/re/10039505

Structured Finance and Covered Bonds Country Risk Rating Criteria  (pub. 18 Sep 
2017)

https://www.fitchratings.com/site/re/903496

Additional Disclosures 

Dodd-Frank Rating Information Disclosure Form 

https://www.fitchratings.com/site/dodd-frank-disclosure/10042723

Solicitation Status 

https://www.fitchratings.com/site/pr/10042723#solicitation

Endorsement Policy 

https://www.fitchratings.com/regulatory

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