One Rating Raised, Seven Affirmed On Hyundai Auto Lease Securitization Trust 2017-A And 2017-B

  • We reviewed two Hyundai Auto Lease Securitization Trust ABS transactions backed by prime auto leases originated and serviced by Hyundai Capital America.
  • We raised our rating on one class and affirmed our ratings on seven classes from the two series.
  • The rating actions reflect our views regarding future collateral performance as well as the transactions' structures and credit enhancement, among other factors.
NEW YORK (S&P Global Ratings) March 13, 2019--S&P Global Ratings today raised 
its ratings on one class and affirmed its ratings on seven classes from Hyundai
Auto Lease Securitization Trust (HALST) 2017-A and 2017-B.

Today's rating actions reflect collateral performance to date and our 
expectations regarding future collateral performance, as well as each 
transaction's structure and credit enhancement. Additionally, we incorporated 
secondary credit factors, including payment priorities under various 
scenarios, and sector- and issuer-specific analyses. Considering all these 
factors, we believe the notes' creditworthiness is consistent with the raised 
and affirmed ratings.

HALST 2017-A has experienced overall residual gains as returned vehicles 
continue to maintain higher values than initial forecasts. As of the February 
2019 distribution date, when approximately 39% of the residuals were initially 
scheduled to come due, the transaction had benefitted from cumulative residual 
gains on returned vehicles of approximately 0.86% of the aggregate initial 
securitization value.

HALST 2017-B has also experienced overall residual gains as returned vehicles 
continue to maintain higher values than initial forecasts. As of the February 
2019 distribution date, when approximately 16% of the residuals were initially 
scheduled to come due, the transaction had benefitted from cumulative residual 
gains on returned vehicles of approximately 0.36% of the aggregate initial 
securitization value.

Each transaction has experienced lower credit losses than our initial 
expectations. We have lowered our loss expectations due to lower-than-expected 
default frequencies and severity, and our view of future collateral 
performance (see tables 1 and 2).

Table 1
Collateral Performance (%)
As of the February 2019 distribution date
                    Pool       Note    Current     60+ day
Series     Mo.    factor     factor        CNL     delinq.
2017-A      25     41.46      32.14       0.58        0.30
2017-B      21     59.36      51.27       0.42        0.27
Mo.--Month. CNL--Cumulative net loss. Delinq.--Delinquencies.

Table 2
CNL Expectations (%)
                Original            Revised
                lifetime           lifetime
Series          CNL exp.           CNL exp.
2017-A         1.10-1.30               0.65
2017-B         1.10-1.30               0.60
CNL exp.--Cumulative net loss expectations.

Each transaction contains a sequential principal payment structure in which 
the notes are paid principal by seniority. Each also has credit enhancement in 
the form of a nonamortizing reserve account, overcollateralization, 
subordination for the more senior tranches, and excess spread. Each 
transaction's credit enhancement is at the specified target, and each class' 
credit support continues to increase as a percentage of the amortizing 
collateral balance (see table 3).

The raised and affirmed ratings reflect our view that the total credit support 
as a percentage of the amortizing pool balances, compared with our expected 
remaining credit losses and residual stresses, is commensurate with each 
raised or affirmed rating.

Table 3
Hard Credit Support (%)
As of the February 2019 distribution date
                           Total hard    Current total hard
                       credit support        credit support
Series       Class     at issuance(i)     (% of current)(i)
2017-A       A-3                16.95                 42.09
2017-A       A-4                16.95                 42.09
2017-A       B                  13.50                 33.77
2017-B       A-2A               17.50                 32.85
2017-B       A-2B               17.50                 32.85
2017-B       A-3                17.50                 32.85
2017-B       A-4                17.50                 32.85
2017-B       B                  13.00                 25.27
(i)Calculated as a percentage of the collateral balance, consisting of a 
reserve account, overcollateralization and, if applicable, subordination.


We will continue to monitor the performance of the outstanding transactions to 
ensure that the credit enhancement remains sufficient, in our view, to cover 
our cumulative net loss expectations and residual stresses under our stress 
scenarios for each of the rated classes.

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