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CNH Capital Australia Receivables Trust Series 6 Senior Notes Rating Affirmed

MELBOURNE (S&P Global Ratings) Sept. 18, 2023--S&P Global Ratings today affirmed its 'AAA (sf)' rating on the Senior notes issued by Perpetual Trustee Co. Ltd. as trustee for CNH Capital Australia Receivables Trust Series 6. The Senior notes are backed by chattel mortgage, finance lease, and hire purchase contracts secured by agricultural, construction, and light commercial equipment that were originated by CNH Industrial Capital Australia Pty Ltd. (CNHI Capital).

The rating affirmation follows the increase in the maximum balance of the Senior notes to A$1 billion from A$600 million and extension of the revolving period to September 2024.

Our rating on the Senior notes reflects:

  • That the credit support provided for the Senior notes in the form of subordination is commensurate with the credit risk of the underlying collateral portfolio. Documented eligibility criteria, portfolio parameters, and conditions precedent to note issuance govern the composition of the collateral pool.
  • That all contract payments, including the residual or balloon payments, are an obligation of the borrower. As a result, the trust is not exposed to any market-value risk associated with the sale of the equipment (on performing receivables), which is a risk that can be associated with other products, such as operating leases.
  • That the originator and servicer, CNHI Capital, has a long and stable track record of asset origination. We have reviewed CNHI Capital as the servicer, in line with our "Global Framework For Assessing Operational Risk In Structured Finance Transactions" criteria, and concluded that operational risk does not constrain our rating on the notes. In addition, CNHI Capital meets our "Methodology For Servicer Risk Assessment" criteria.
  • The issuer's capacity to pay interest to the Senior note holders in full on each interest payment date, and to repay principal in full no later than the final maturity date, under stresses commensurate with a 'AAA' rating. Our 'AAA' rating stresses are made on the basis that the issuer does not call the notes, and that the notes must be fully redeemed via the mechanisms under the transaction documents.
  • That liquidity and yield support for the transaction is provided in the form of a dynamically sized cash reserve funded by CNHI Capital. Principal collections can also be used to meet short-term liquidity demands. In addition, an extraordinary expense reserve sized according to the net portfolio balance (subject to a floor and a cap) is provided in the form of a cash reserve funded by CNHI Capital to meet extraordinary expenses.
  • The legal structure of the issuer, which is established as a special-purpose entity and meets our criteria for insolvency remoteness.
  • The counterparty support provided by Australia and New Zealand Banking Group Ltd. as bank account provider and fixed- to floating-rate interest-rate swap provider. Fixed- to floating-rate interest-rate swaps are provided to hedge the mismatch between the fixed-rate payments on the receivables and the floating-rate interest payable on the Senior notes. The transaction documents for the swap and bank accounts include downgrade language consistent with our "Counterparty Risk Framework: Methodology And Assumptions" criteria, published on March 8, 2019, which require the replacement of the counterparty or other remedy, should its rating fall below the applicable rating.

Related Criteria

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Please refer to the initial rating report for any additional regulatory disclosures that may apply to a transaction.


S&P Global Ratings Australia Pty Ltd holds Australian financial services license number 337565 under the Corporations Act 2001. S&P Global Ratings' credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act).

Primary Credit Analyst:Mary Chiang, Melbourne + 61 3 9631 2935;
Secondary Contact:Elizabeth A Steenson, Melbourne + 61 3 9631 2162;

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