OREANDA-NEWS. Fitch Ratings has today affirmed Hyundai Capital Auto Funding VIII Limited (Hyundai VIII) and Hyundai Capital Auto Funding IX Limited (Hyundai IX). The transactions are securitisations of auto loans in South Korea originated by Hyundai Capital Services Inc. (HCS; BBB+/Stable/F2).

The rating actions are as listed below.

Hyundai VIII
USD9.4m class A notes due 2016 affirmed at 'AAAsf'; Outlook Stable

Hyundai IX
USD53.6m class A1 notes due 2017 affirmed at 'AAAsf'; Outlook Stable
USD53.6m class A2 notes due 2017 affirmed at 'AAAsf'; Outlook Stable

KEY RATING DRIVERS
The affirmations reflect significant credit enhancement (CE) build-up in the transactions (84.4% and 39.0% for Hyundai VIII and Hyundai IX, respectively) and the deleveraging of the notes as the transactions are in their controlled amortisation periods. As of the payment date in December 2014, the class A notes of Hyundai VIII have amortised to 3.1% of its original balance, and they are likely to be paid in full at the last payment date in March 2015. The class A1 and A2 notes from Hyundai IX have amortised to 26.8% of their original balance at the payment date in December 2014.

The three-month average delinquency and default rates were reported at 0.03% and 0.02% respectively at 31 December 2014 for Hyundai VIII. The three-month average delinquency and default rates for Hyundai IX were reported at 0.04% and 0.01%, respectively at 31 December 2014. The delinquency and default rates performance for both transactions are were significantly below the thresholds of 1.50% (delinquency) and 1.30% (default) at which early amortisation would be triggered to accelerate the note payments on a pass-through payment basis.

RATING SENSITIVITIES
Fitch evaluated the current cumulative gross defaults of the transactions and compared them to the base case default rates assumed at closing.

For Hyundai VIII, the current cumulative default rate of 0.31% is far below the 2.1% base case default rate assumed at closing. All else being equal, the cumulative default rate may have to rise by 6.8x before a downgrade of the Class A notes would be considered. Fitch considers the probability of a downgrade prior to the maturity of the Class A notes in March 2015 to be remote.

For Hyundai IX, the current cumulative default rate of 0.29% is far below the 2.4% base case default rate assumed at closing. All else being equal, the cumulative default rate may have to rise by 8.3x before a downgrade of the Class A1 and Class A2 notes would be considered.

Initial key rating drivers and rating sensitivities are described further in the new issue reports for Hyundai VIII, dated 10 November 2010 and for Hyundai IX, dated 25 August 2011.