Sign in Subscribe
Moody's Investors Service Inc.

Moody's Assigns Definitive Ratings to ECARAT DE S.A. Asset-Backed Floating Rate Notes

Strategic Insights

— 2 min read

Moody's Investors Service has assigned definitive ratings to the Notes issued by ECARAT DE S.A., COMPARTMENT LEASE 2025-1, a bond backed by a revolving pool of German auto leases originated by Stellantis Bank S.A. Niederlassung Deutschland. The ratings reflect the credit quality of the portfolio, the structural features of the transaction, and its legal integrity. The transaction benefits from various credit strengths, including an amortizing liquidity reserve fund and a granular portfolio of assets. However, it also features some credit weaknesses, such as pro-rata amortization of the notes under certain scenarios.

Key Takeaways:

  • The Notes are backed by a 1-year revolving pool of German auto leases originated by Stellantis Bank S.A. Niederlassung Deutschland, with a portfolio of assets amounting to approximately EUR 1,000.0 million as of June 5th, 2025.
  • The transaction benefits from a granular portfolio of assets and an amortizing liquidity reserve fund sized at 1.3% of Class A, B, C, and D note balance, with a floor at 0.5% of Class A, B, C, and D initial note balance.
  • However, the transaction features some credit weaknesses, including pro-rata amortization of the notes under certain scenarios, with various mitigants included in the transaction structure, such as an independent cash manager and sufficient liquidity provided by the liquidity reserve.
  • The portfolio is distributed through dealers to private individuals (60.0%) and commercial borrowers (40.0%) to finance the purchase of new (70.4%) and used (29.6%) cars, with 54,009 auto finance contracts to 49,819 borrowers, and a weighted average seasoning of 1.4 years.
  • The expected defaults and recoveries capture the analyst's expectations of performance considering the current economic outlook, while the PCE captures the loss expected in the event of a severe recession scenario.
  • Portfolio expected defaults of 1.2% is lower than the EMEA Auto ABS average, and is based on the analyst's assessment of the lifetime expectation for the pool, taking into account historic performance, benchmark transactions, and other qualitative considerations.
  • Portfolio expected recoveries of 50.0% is in line with the EMEA Auto ABS average, and is based on the analyst's assessment of the lifetime expectation for the pool, taking into account historic performance, benchmark transactions, and other qualitative considerations.
  • PCE of 7.5% is in line with the EMEA Auto ABS average, and is based on the analyst's assessment of the pool, which is mainly driven by the relative ranking to originator peers in the EMEA market, benchmark transactions, and other qualitative considerations.

Statistics:

  • Total portfolio assets: approximately EUR 1,000.0 million as of June 5th, 2025
  • Portfolio expected defaults: 1.2%
  • Portfolio expected recoveries: 50.0%
  • PCE: 7.5%
  • Coefficient of Variation ('CoV'): 82.5%
  • Number of auto finance contracts: 54,009
  • Number of borrowers: 49,819
  • Weighted average seasoning of 1.4 years

Sources:

  • Moody's Ratings (Moody's) has assigned definitive ratings to Notes issued by ECARAT DE S.A., COMPARTMENT LEASE 2025-1: https://www.moodys.com/
  • Moody's Global Approach to Rating Auto Loan- and Lease-Backed ABS, published in June 2025: https://ratings.moodys.com/rmc-documents/445561
  • Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Read more