DBRS Finalizes Provisional Ratings on Hertz Fleet Lease Funding LP, Series 2016-1

DBRS, Inc. (DBRS) has today finalized its provisional ratings on the following classes issued by Hertz Fleet Lease Funding LP, Series 2016-1:

-- Series 2016-1, Class A-1 rated AAA (sf)
-- Series 2016-1, Class A-2 rated AAA (sf)
-- Series 2016-1, Class B rated AA (high) (sf)
-- Series 2016-1, Class C rated A (high) (sf)
-- Series 2016-1, Class D rated BBB (high) (sf)
-- Series 2016-1, Class E rated BBB (sf)

The ratings are based upon a review by DBRS of the following analytical considerations:
(1) Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- Credit enhancement levels are sufficient to support DBRS stressed loss assumptions under various stress scenarios.
-- The yield supplement account is established to supplement the yield from any lease that does not meet a minimum yield requirement.
(2) The ability of the Transaction to withstand stressed cash flow assumptions and repay investors according to the terms in which they have invested. The rating addresses the payment of timely interest on a monthly basis and principal by the legal final maturity date.
(3) Donlen’s capabilities with regard to originations, underwriting and servicing.
(4) DBRS has performed an operational review of Donlen and considers the Company to be an acceptable originator and servicer.
(5) The high credit quality and historical performance of the Collateral.
(6) The leased vehicles are essential use vehicles for customers; therefore, such leases are likely to be affirmed by an obligor in a bankruptcy proceeding.
(7) These leases are hell-or-high water and triple net with:
-- No setoff language and
-- Lessee responsible for all taxes/expenses.
(8) The legal structure and presence of legal opinions that address the true sale of the assets, the non-consolidation of the Issuer with Donlen, the Issuer’s valid first-priority security interest in the assets and the consistency with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.

Notes:
The applicable methodology is Rating U.S. Auto Fleet Lease Securitizations, which can be found on our website under Methodologies.

The full report providing additional analytical detail is available by clicking on the link or by contacting us at info@dbrs.com.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.