Fitch Affirms 12 SMART ABS Transactions

(The following statement was released by the rating agency)

SYDNEY, January 20 (Fitch) Fitch Ratings has affirmed the ratings of 12 SMART 
transactions, consisting of 82 classes. The transactions are securitisations of 
Australian auto and equipment receivables originated by Macquarie Leasing Pty 
Limited (Macquarie Leasing). The rating actions are as follows:

SMART Series 2010-2 Trust (as at December 2013):

AUD76.2m Class A-2 (ISIN AU3FN0012043) affirmed at 'AAAsf'; Outlook Stable;

AUD3.6m Class B (ISIN AU3FN0012050) affirmed at ‘AAsf’; Outlook Stable;

AUD4.3m Class C (ISIN AU3FN0012068) affirmed at ‘Asf’; Outlook Stable;

AUD4.0m Class D (ISIN AU3FN0012076) affirmed at ‘BBBsf’; Outlook Stable; and

AUD4.0m Class E affirmed at ‘BBsf’; Outlook Stable.

SMART Series 2011-1US Trust (as at December 2013):

USD152.6m Class A-4a (ISIN US78446EAF43) affirmed at 'AAAsf'; Outlook Stable;

AUD7.3m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD8.9m Class C affirmed at ‘Asf’; Outlook Stable;

AUD8.1m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD8.1m Class E affirmed at ‘BBsf’; Outlook Stable.

Class A-3a (ISIN US78446EAD94) paid in full in November 2013.

Class A-3b (ISIN US78446EAE77) paid in full in November 2013.

SMART Series 2011-2US Trust (as at December 2013):

USD17.1m Class A-3a (ISIN USQ8520NAD77) affirmed at 'AAAsf'; Outlook Stable;

USD22.0m Class A-3b (ISIN USQ8520NAE50) affirmed at 'AAAsf'; Outlook Stable;

USD153.6m Class A-4a (ISIN USQ8520NAF26) affirmed at 'AAAsf'; Outlook Stable;

AUD8.6m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD10.5m Class C affirmed at ‘Asf’; Outlook Stable;

AUD9.6m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD9.6m Class E affirmed at ‘BBsf’; Outlook Stable.

Class A-2a (ISIN USQ8520NAB12) paid in full in March 2013.

Class A-2b (ISIN USQ8520NAC94) paid in full in March 2013.

SMART Series 2011-3 Trust (as at December 2013):

AUD222.8m Class A-2A (ISIN AU0000SNAHB9) affirmed at 'AAAsf'; Outlook Stable;

GBP51.8m Class A-2G (ISIN XS0691593114) affirmed at 'AAAsf'; Outlook Stable;

AUD14.4m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD17.3m Class C affirmed at ‘Asf’; Outlook Stable;

AUD15.7m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD15.7m Class E affirmed at ‘BBsf’; Outlook Stable.

SMART Series 2011-4US Trust (as at December 2013):

USD16.2m Class A-3a (ISIN US78446NAD93) affirmed at 'AAAsf'; Outlook Stable;

USD88.2m Class A-3b (ISIN US78446NAE76) affirmed at 'AAAsf'; Outlook Stable;

USD30m Class A-4a (ISIN US78446NAF42) affirmed at 'AAAsf'; Outlook Stable;

USD51m Class A-4b (ISIN US78446NAG25) affirmed at 'AAAsf'; Outlook Stable;

AUD7.7m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD10.6m Class C affirmed at ‘Asf’; Outlook Stable;

AUD9.7m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD8.7m Class E affirmed at ‘BBsf’; Outlook Stable.

Class A-2a (ISIN US78446NAB38) paid in full in July 2013.

Class A-2b (ISIN US78446NAC11) paid in full in July 2013.

SMART Series 2012-1US Trust (as at December 2013):

USD57.4m Class A-3a (ISIN US83173KAD46) affirmed at 'AAAsf'; Outlook Stable;

USD100.4m Class A-3b (ISIN US83173KAE29) affirmed at 'AAAsf'; Outlook Stable;

USD90m Class A-4a (ISIN US83173KAF93) affirmed at 'AAAsf'; Outlook Stable;

AUD9.9m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD13.7m Class C affirmed at ‘Asf’; Outlook Stable;

AUD12.4m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD11.2m Class E affirmed at ‘BBsf’; Outlook Stable.

Class A-2a (ISIN US83173KAB89) paid in full in December 2013.

Class A-2b (ISIN US83173KAC62) paid in full in December 2013.

SMART Series 2012-2US Trust (as at December 2013):

USD9.2m Class A-2a (ISIN US78447DAB47) affirmed at 'AAAsf'; Outlook Stable;

USD38.4m Class A-2b (ISIN US78447DAC20) affirmed at 'AAAsf'; Outlook Stable;

USD66m Class A-3a (ISIN US78447DAD03) affirmed at 'AAAsf'; Outlook Stable;

USD91m Class A-3b (ISIN US78447DAE85) affirmed at 'AAAsf'; Outlook Stable;

USD27m Class A-4a (ISIN US78447DAF50) affirmed at 'AAAsf'; Outlook Stable;

USD51m Class A-4b (ISIN US78447DAG34) affirmed at 'AAAsf'; Outlook Stable;

AUD11.3m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD15.6m Class C affirmed at ‘Asf’; Outlook Stable;

AUD14.2m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD12.7m Class E affirmed at ‘BBsf’; Outlook Stable.

Class A-1 (ISIN US78447DAA63) paid in full on the March 2013 payment date.

SMART ABS Series 2012-3EQ Trust (as at December 2013):

AUD97.9m Class A-2 (ISIN AU3FN0016416) affirmed at 'AAAsf'; Outlook Stable; and

AUD3.3m Class B (ISIN AU3FN0016424) affirmed at ‘AAsf’; Outlook Stable.

Class A-1 (ISIN AU3FN0016408) paid in full in June 2013.

SMART ABS Series 2012-4US Trust (as at December 2013):

USD68.9m Class A-2a (ISIN US83172LAB71) affirmed at 'AAAsf'; Outlook Stable;

USD54.5m Class A-2b (ISIN US83172LAE11) affirmed at 'AAAsf'; Outlook Stable;

USD175m Class A-3a (ISIN US83172LAC54) affirmed at 'AAAsf'; Outlook Stable;

USD60m Class A-3b (ISIN US83172LAF85) affirmed at 'AAAsf'; Outlook Stable;

USD82.5m Class A-4a (ISIN US83172LAD38) affirmed at 'AAAsf'; Outlook Stable;

USD20m Class A-4b (ISIN US83172LAG68) affirmed at 'AAAsf'; Outlook Stable;

AUD9.1m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD30m Class C affirmed at ‘Asf’; Outlook Stable;

AUD20.6m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD18.5m Class E affirmed at ‘BBsf’; Outlook Stable.

Class A-1 (ISIN US83172LAA98) paid in full in June 2013.

SMART ABS Series 2013-1US Trust (as at January 2014):

USD35.4m Class A-2a (ISIN US7844NAB29) affirmed at 'AAAsf'; Outlook Stable;

USD41.3m Class A-2b (ISIN US7844NAC02) affirmed at 'AAAsf'; Outlook Stable;

USD50m Class A-3a (ISIN US7844NAD85) affirmed at 'AAAsf'; Outlook Stable;

USD89m Class A-3b (ISIN US7844NAE67) affirmed at 'AAAsf'; Outlook Stable;

USD106m Class A-4a (ISIN US7844NAF33) affirmed at 'AAAsf'; Outlook Stable;

USD25m Class A-4b (ISIN US7844NAG16) affirmed at 'AAAsf'; Outlook Stable;

AUD5.9m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD19.4m Class C affirmed at ‘Asf’; Outlook Stable;

AUD13.3m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD12m Class E affirmed at ‘BBsf’; Outlook Stable.

Class A-1 (ISIN US78447NAA46) paid in full in September 2013.

SMART ABS Series 2013-2US Trust (as at January 2014):

USD43.9m Class A-2a (ISIN US7844UAB6188) affirmed at 'AAAsf'; Outlook Stable;

USD139.1m Class A-2b (ISIN US7844UAC45) affirmed at 'AAAsf'; Outlook Stable;

USD50m Class A-3a (ISIN US7844UAD28) affirmed at 'AAAsf'; Outlook Stable;

USD167.5m Class A-3b (ISIN US7844UAE01) affirmed at 'AAAsf'; Outlook Stable;

USD137.5m Class A-4a (ISIN US7844UAF75) affirmed at 'AAAsf'; Outlook Stable;

USD65m Class A-4b (ISIN US7844UAG58) affirmed at 'AAAsf'; Outlook Stable;

AUD9.4m Class B affirmed at ‘AAsf’; Outlook Stable;

AUD31.1m Class C affirmed at ‘Asf’; Outlook Stable;

AUD21.3m Class D affirmed at ‘BBBsf’; Outlook Stable; and

AUD19.2m Class E affirmed at ‘BBsf’; Outlook Stable.

Class A-1 (ISIN US78447NAA46) paid in full in January 2014.

SMART ABS Series 2013-3 Trust (as at January 2014):

AUD374.4m Class A (ISIN AU3FN0020582) affirmed at 'AAAsf'; Outlook Stable; and

AUD12.5m Class B (ISIN AU3FN0020590) affirmed at ‘AAsf’; Outlook Stable.

KEY RATING DRIVERS

The affirmations reflect Fitch's view that available credit enhancement is 
sufficient to support the notes at their current rating levels. 

The performance of the SMART transactions is well within Fitch’s expectations. 
Net losses experienced since closing have been below 1.5% and 30+ day 
delinquencies are consistently tracking under 1.3%. To date, excess spread has 
been more than sufficient to cover for losses experienced in each transaction. 

The 2010-2, 2011-1US, 2011-2US, 2011-3, 2011-4US, 2012-1US, 2010-3EQ 
transactions have been paying principal on a pro-rata basis and are expected to 
continue to until their respective call dates. 2012-2US, 2012-4US, 2013-1US, 
2013-2US and 2013-3 continue to pay principal on a sequential basis as of the 
December 2013 & January 2014 payment date. The payment method is expected to 
switch to pro-rata once their respective pro-rata paydown triggers have been 
met. 

RATING SENSITIVITIES

The prospects for downgrades are considered remote given the level of 
subordination and excess spread available on all transactions. A significant and 
unexpected increase in delinquencies, defaults and losses would be necessary 
before any negative rating action would be considered. Credit enhancement levels 
for the 'AAAsf' rated notes can support many multiples of arrears. 

INITIAL KEY RATING DRIVERS

The final ratings and outlooks assigned to the notes are based on: the quality 
of the collateral; the credit enhancement provided by the respective subordinate 
notes; a strong flow of excess spread; the liquidity reserve account sized at 
1.0% of the aggregate invested amount of the notes at closing; the interest rate 
swap arrangements the trustee has entered into; and Macquarie Leasing Pty Ltd’s 
lease underwriting and servicing capabilities.

INITIAL RATING SENSITIVITIES

The unanticipated increases in the frequency of defaults and loss severity on 
defaulted receivables could produce loss levels higher than Fitch’s base case, 
and would likely result in a decline in credit enhancement (CE) and remaining 
loss-coverage levels available to the notes. Decreased CE may make certain note 
ratings susceptible to potential negative rating actions, depending on the 
extent of the decline in coverage.

Contacts:

James Leung (SMART 2010-2, SMART 2011-1US, SMART 2011-2US, SMART 2011-3, SMART 
2011-4US, SMART 2012-1US)

Director

+61 2 8256 0322

Fitch Australia Pty Ltd., Level 15, 77 King St, Sydney, NSW 2000

Ben Newey (SMART 2012-2US, SMART 2012-3EQ, SMART 2012-4US)

Director

+61 2 8256 0341

Courtney Miller (SMART 2013-1US, SMART 2013-2US, SMART 2013-3)

Analyst

+61 2 8256 0347

Committee Chairperson

Natasha Vojvodic

Senior Director

+61 2 8256 0350

Media Relations: Iselle Gonzalez, Sydney, Tel: +61 2 8256 0326, Email: 
iselle.gonzalez@fitchratings.com.

The source of information used to assess these ratings was the servicer 
(Macquarie Leasing). The issuer has informed Fitch that not all relevant 
underlying information used in the analysis of the rated notes is public.

Additional information is available at www.fitchratings.com. 

Applicable criteria, “Global Structured Finance Rating Criteria”, dated 24 May 
2013; “APAC Consumer ABS Rating Criteria”, dated 24 July 2013; “Counterparty 
Criteria for Structured Finance and Covered Bonds”, dated 13 May 2013 and 
“Counterparty Criteria for Structured Finance and Covered Bonds: Derivative 
Addendum”, dated 13 May 2013 are available at www.fitchratings.com.

Individual representations, warranties, and enforcement mechanisms reports are 
available for all structured finance transactions initially rated on or after 26 
September 2011 at www.fitchratings.com.

Applicable Criteria and Related Research: 

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

APAC Consumer ABS Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=711196

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155

Counterparty Criteria for Structured Finance and Covered Bonds: Derivative 
Addendum

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707156

Representations, Warranties, and Enforcement Mechanisms in Global Structured 
Finance Transactions -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

Additional Disclosure 

Solicitation Status 

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=815650

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