Late Friday afternoon (May 16) Standard & Poor’s announced it would remove its credit watch negative standing on several auto lease transactions, all of which had been placed on review May 12, just four days earlier.
The initial moved — tied to a reconsideration of the weight of the lien on the assets by the Pension Benefit Guaranty Corp. — stirred up a mass of criticism from Street researchers (see this week's coverage).
S&P affirmed 14 classes from six deals, and reiterated its credit watch negative on 17 class from 10 deals.
The rating agency said that it will continue to consider the following in its review of the sector:
- The unsecured credit rating of the plan sponsor;
- The status of the pension fund. This will include consideration of asset and liability balances relative to the assets supporting the securitization. The materiality of the potential pension liability will be measured relative to titling trust assets and available credit enhancement to investors;
- ABS investor's exposure period based on the expected maturity of the note class; and
- Any structural feature built into the transaction that otherwise mitigates the risk. ( S&P)