Approximately $128 million of asset-backed securities affected.
New York, February 17, 2011 -- Moody's Investors Service has upgraded seven subordinated classes of notes
sponsored by CNH Capital America LLC. The notes are secured by
pools of agricultural and construction equipment loans. The complete
rating actions are as follows:
Issuer: CNH Equipment Trust 2007-B
Class B, Upgraded to Aaa (sf); previously on Jan 23,
2011 A3 (sf) Placed Under Review for Possible Upgrade
Issuer: CNH Equipment Trust 2007-C
Class B, Upgraded to Aaa (sf); previously on Jan 23,
2011 Baa3 (sf) Placed Under Review for Possible Upgrade
Issuer: CNH Equipment Trust 2008-A
Class B, Upgraded to Aaa (sf); previously on Jan 23,
2011 A2 (sf) Placed Under Review for Possible Upgrade
Issuer: CNH Equipment Trust 2008-B
Class B, Upgraded to Aaa (sf); previously on Jan 23,
2011 A2 (sf) Placed Under Review for Possible Upgrade
Issuer: CNH Equipment Trust 2009-A
Class B, Upgraded to Aa2 (sf); previously on Jan 23,
2011 A2 (sf) Placed Under Review for Possible Upgrade
Issuer: CNH Equipment Trust 2009-B
Class B, Upgraded to Aa1 (sf); previously on Jan 23,
2011 A2 (sf) Placed Under Review for Possible Upgrade
Issuer: CNH Equipment Trust 2009-C
Class B, Upgraded to Aa3 (sf); previously on Jan 23,
2011 A1 (sf) Placed Under Review for Possible Upgrade
The rating action was prompted by strong performance of the underlying
collateral pools and a high amount of credit enhancement protecting the
noteholders against collateral losses. Available credit enhancement
protecting Class B noteholders includes non-declining reserve accounts
and excess spread. Because the reserve accounts in these transactions
are non-declining, they increase as a percentage of the current
pool balance as the deals amortize.
The 2007 and 2008 transactions are comprised of roughly 75% agricultural
equipment and 25% construction equipment loans. Performance
of the underlying pools has stabilized in recent months as late stage
delinquencies and the rate of new charge-offs have been declining.
Our expected net losses and the Aaa volatility proxy for the 2007-B
and 2007-C transactions are 2.6% and 14%,
respectively. If the expected losses were to increase by 15%
the notes could be downgraded. Our expected net losses and the
Aaa volatility proxy for the 2008-A transaction are 2.0%
and 17%, respectively, and for the 2008-B transaction
are 1.7% and 9%, respectively. If the
expected losses were to increase by 10-15% the notes could
be downgraded.
The 2009 transactions are comprised of roughly 95% agricultural
equipment and 5% construction equipment loans. Performance
of the underlying pools has stabilized in recent months as late stage
delinquencies and the rate of new net charge-offs have been declining.
Our projected lifetime losses and Aaa volatility proxies for the 2009-A
, 2009-B, and 2009-C transactions are 1.15%
and 8%, respectively. If lifetime losses were to increase
by 10-15% the notes could be downgraded.
The primary source of uncertainty in the rating action is the macro-economic
environment and its effect on Agriculture and Construction sectors.
Moody's global economic growth scenario is expected to be solid but not
spectacular in 2011, with real GDP expanding about 2.5%.
Business investment will lead growth in 2011, thanks to strong profits
and the need for firms to replace obsolete equipment.
The principal methodology used in taking these actions was 'Moody's Approach
to Rating Securities Backed by Equipment Leases and Loans', published
in April 2007. In addition, Moody's publishes a weekly summary
of structured finance credit, ratings and methodologies, available
to all registered users of our website at www.moodys.com/SFQuickCheck.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
confidential and proprietary Moody's Investor Service's information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purpose of maintaining
a credit rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
New York
Irina Faynzilberg
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Vikram Josyula
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's upgrades seven subordinated classes of notes in CNH-sponsored transactions