DBRS Rates Senior Notes Issued by SAF Funding Limited

DBRS Ratings Limited (DBRS) has today assigned a AAA (sf) rating to the ₤150,000,000 Senior Notes issued by SAF Funding Limited. The assets supporting the Senior Notes were originated by Singers Corporate Asset Finance Ltd, (“SCAF”) and Singers Healthcare Finance Ltd, (“SHF”) both wholly owned subsidiaries of Singers Asset Finance Holdings Ltd. The SCAF assets consist of small to medium ticket full payout finance leases and hire purchase agreements on hard, mainly wheeled assets, while the SHF assets consist of operating and finance leases primarily to UK National Health Service Trusts.

The final ratings are based upon review by DBRS of the following analytical considerations:

•Transaction capital structure and form and sufficiency of available credit enhancement.

•Relevant credit enhancement is in the form of a subordinated loan providing overcollateralisation. Credit enhancement levels are sufficient to support DBRS’s projected expected cumulative net loss (CNL) assumption under various stress scenarios at a AAA (sf) standard.

•The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms in which they have invested. For this transaction, the rating addresses the payment of timely interest on a monthly basis and principal by the legal final maturity date.

•The transaction parties’ capabilities with respect to originations, underwriting, servicing, and financial strength.

•The credit quality of the collateral and performance of Singers Asset Finance Holdings’ equipment lease portfolio.

DBRS derives expected and stressed loss forecasts based upon historical data. For equipment leasing transactions, the primary variables stressed include frequency and severity upon default, and residual value losses.

In addition to reviewing results encompassing sensitivities on loss levels, DBRS also reviews three different modeling scenarios whereby losses are distributed more heavily in the beginning, middle, or end of the transaction’s life than is suggested by the historical data (front-loaded, belly, back-loaded).

Note:
The principal methodologies applicable are Rating European Consumer Asset-Backed Securitisations and the DBRS Legal Criteria for European Structured Finance Transactions, which can be found on our website under Methodologies.

DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

For additional information on this rating, please refer to the linking document located below.