KEY RATING DRIVERS
Collateral/Obligor Performance; High Copier/Printer Concentration: Of the GALC 2023-1 pool, 64.7% consists of copiers/printers (also known as office imaging equipment), which is up from 2022-1 (62.3%). The shift in copier concentration is in line with industry trends due to post-pandemic working-from-home conditions. Fitch expects this concentration to gradually decrease. Despite the high concentration, copiers/printers have historically performed better than other equipment types within GreatAmerica's portfolio.
Forward-Looking Approach to Derive Base-Case Loss Proxy; Strong Managed Portfolio/ABS Performance: GreatAmerica's managed static pool continues to demonstrate strong and stable cumulative net loss (CNL) performance, with CNLs tracking well below those of peak recessionary vintages. All but one of GreatAmerica's securitizations have experienced CNLs within Fitch's initial expectations. Fitch utilized the 2006-2009 and 2018-2019 managed portfolio vintages and prior ABS performance to derive the CNL loss proxy of 2.40%. This proxy is in line with the past two transactions and pre-pandemic levels, as it considers a potentially softening in economic conditions over the next year. more here