Fitch Rates BAC San Jose DPR Funding Ltd.'s Series 2014 Notes 'BBB+'

Fitch Ratings has assigned ratings to BAC San Jose DPR Funding Ltd.'s notes issuance as follows:

--USD50 million series 2014-1 notes due 2019 'BBB+';

--USD160 million series 2014-2 notes due 2021 'BBB+.

The Rating Outlook is Stable.

The series 2014 notes are backed by existing and future U.S. dollar-denominated diversified payment rights (DPRs) originated by Banco BAC San Jose, S.A. (BAC San Jose), part of the BAC/Credomatic group. The collateral includes MT100 payment orders originated from export and trade finance payments, service related flows, capital flows, and flows related to tourism, foreign direct investment and personal remittances. The majority of the DPRs are processed by designated depositary banks (DDBs) that have signed acknowledgment agreements (AA).

The issuances are the first out of BAC San Jose's new DPR securitization program. Fitch's ratings address timely payment of interest and principal on a quarterly basis.

KEY RATING DRIVERS

Credit Quality of BAC San Jose: Fitch rates BAC San Jose's local currency (LC) Issuer Default Rating (IDR) 'BBB' with a Stable Outlook. The IDRs assigned to the bank reflect the support it would receive from its parent, Banco de Bogota ('BBB+'/Outlook Stable), should it be required. Fitch also assigns BAC San Jose a viability rating (VR) of 'bb+', which reflects the intrinsic creditworthiness of the bank.

Going Concern Assessment Score: Fitch assigns a going concern assessment (GCA) score of 'GC2' to BAC San Jose based on its position as the largest private bank in Costa Rica, representing approximately 10% of system assets.

Parental Support Limits Uplift: Fitch limits the uplift of the ratings assigned to the future flow transaction to one notch from BAC San Jose's LC IDR, which already benefits from a two-notch uplift from the bank's VR. Fitch rates the issuances three notches above BAC San Jose's VR.

Moderately Strong DSCRs: Fitch estimates quarterly debt service coverage ratios (DSCRs) to be around 41.5x (based on average quarterly DDB collections for the past three years and the maximum quarterly debt service for the life of the transaction). Since 2010, DPR flows have steadily increased and approximately 90% of flows were processed by DDBs.

Adequate Program Size: The DPR program represent approximately 6.2% of BAC San Jose's total liabilities, comparable in size to similar DPR programs from the Central American region but higher when compared with other countries in Latin America.

Additional rating drivers are described in Fitch's new issue report 'BAC San Jose DPR Funding Ltd.,' available shortly on Fitch's website.

RATING SENSITIVITIES

The ratings assigned to the program are sensitive to changes in the credit quality of BAC San Jose as well as changes in the ratings assigned to the Costa Rican sovereign. The ratings are sensitive to downgrades of the LC IDR of the bank and the ability of the DPR business line to continue operating, as reflected by the GCA score. Any change in these variables will be analyzed in a rating committee to assess the possible impact on the transaction's ratings.

For more details on Fitch's analysis of the proposed transaction please refer to the new issue report 'BAC San Jose DPR Funding Ltd.,' available shortly on Fitch's website.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Future Flow Securitization Rating Criteria' (June 2014);

--'Global Structured Finance Rating Criteria' (August 2014);

--'Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds' (May 2014).

Applicable Criteria and Related Research:

Future Flow Securitization Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749768

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=725537

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=924595

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