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TEXT-Fitch affirms DFM 2005 at 'AAAsf'; stable outlook

Monday, 1 Oct 2012 | 7:25 AM ET

(The following statement was released by the rating agency)

Oct 01 - Fitch Ratings has affirmed DFM Vehicle Loans Securitisation 2005's (DFM 2005) notes as follows:

Class B1: affirmed at 'AAAsf', Stable Outlook Class B2: affirmed at 'AAAsf', Stable Outlook

To date, the transaction has experienced zero delinquencies and zero defaults in the loans made to the car dealers. The transaction is amortising with the total notes outstanding having decreased to EUR143m as of September 2012 from EUR815m in June 2010. The reserve fund remains above its target floor level of EUR7.5m although it is not expected to amortise from EUR15.8m.

The transaction involves the securitisation of auto loans made by DFM N.V. (DFM) to auto dealers in the Netherlands. The auto dealers use the loans to make operational leases to SMEs in the Netherlands. The loans to the dealers are secured on both the underlying lease contracts and on the leased vehicles. DFM is a subsidiary of Volkswagen Pon Financial Services BV, a joint venture between Volkswagen Financial Services AG and Pon Holding B.V., a private company in the Netherlands. Volkswagen AG ('A-'/Positive/'F2') is the parent company of Volkswagen Financial Services AG. DFM is not rated by Fitch. The transaction closed in June 2005 and had a revolving period of five years, which ended in June 2010. Since then, the transaction has been amortising sequentially with the notes' current outstanding balance representing approximately 17.6% of the original note balance.

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((Bangalore Ratings Team, Hotline: +91 80 4135 5898, Bhanu.priya@thomsonreuters.com, Group id: BangaloreRatings@thomsonreuters.com, Reuters Messaging: Bhanu.Priya.reuters.com@reuters.net))