In late December, Fitch released a report detailing updates to its franchise loan securitization rating criteria. Notably, the report attempts to tackle head-on buzzword issues such as "asset quality" within franchise pools and "aggressive underwriting."

"If you ask people why there are problems in this sector, everyone is going to use those buzzwords," said Warren Wells, associate director at Fitch. But no one, to date, has gone in and defined what is aggressive underwriting' and what makes for good quality' in the asset pools. We believe this a step in the right direction in getting behind the buzzwords."

Other enhancements to Fitch's criteria over the past year include a more detailed review of top loan files, closer analysis of collateral value, more stringent limitations and penalties for high obligor concentrations, greater servicer scrutiny and structural recommendations aimed at improving liquidity within the deal.

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