Volkswagen Finance (China) Co., LTD DRIVER CHINA … · VOLKSWAGEN FINANCE (CHINA) CO., LTD 1 Volkswagen Finance (China) Co., LTD DRIVER CHINA ONE ... in our analysis by raising the

STRUCTURED FINANCE

VOLKSWAGEN FINANCE (CHINA) CO., LTD 1

Volkswagen Finance (China) Co., LTD

DRIVER CHINA ONE AUTO LOAN ABS (Red Pool)

Credit Rating Report Final Ratings

Amount

(RMB10K)

% of

Asset

Interest

Rate Type Rating

A 69,900.00 87.41 Fixed AAA

B 4,400.00 5.50 Fixed A+

Sub-Notes 5,272.39 6.59 Fixed NR

OC 399.86 0.50

NR——Not rated

NB：Notes are calculated based on Aggregate Cutoff Date Discounted

Principal Balance.

Transaction Summary

Cutoff Date：March 31, 2014

Final Maturity Date：August 26, 2020

Transaction Type：Static Cash Flow ABS

Vehicle Type：Special Purpose Trust

Trust Asset (Red Pool)：RMB798.26Million auto loan

portfolio originated by Volkswagen Finance (China) Co.,

LTD (Aggregate discounted principal balance equals to

RMB799.72Million discounted at 8.47%)

Credit Enhancement Mechanism：Senior/Junior Structure，

Overcollateralization, Targeted Overcollateralisation

Amount, Cash Collateral Account, Trigger Events,

Monthly Collateral Account

Originator/Servicer：Volkswagen Finance (China) Co.,

LTD

Trust Company/Issuer：CITIC Trust Co., LTD

Financial Advisor：The Hongkong and Shanghai Banking

Corporation Limited

Lead Underwriter：China International Capital

Corporation Limited

Report Date [ ] [ ] 2014

Analyst Song Zheng Lv Zhenyang

Tel：010-85679696

Fax：010-85679228

Email：[email protected]

Address：17/F, PICC Building, 2 Jianguomenwai Avenue,

Chaoyang District, Beijing PRC, 100022

Website：http://www.lhratings.com

Opinion

Having considered factors such as quality of the

underlying asset pool, transaction structure, legal

factors, operational risk and conducted cash flow

analysis, China Lianhe Credit Rating Co.,Ltd

confirms that Volkswagen Finance (China) Co.,

LTD DRIVER CHINA ONE AUTO LOAN ABS

(RED POOL) Class A Notes and Class B Notes

(together the “Senior Notes”) are rated at AAA

and A+ respectively. The Subordinated Notes are

not rated.

The rating for the Class A Notes indicates that the

Class A Notes have extremely strong ability to

meet their financial commitment and have very

low probability of default. The rating for the Class

B Notes indicates that the Class B Notes have a

strong ability to meet their financial commitment

and have a low probability of default.

Strengths

1. The initial weighted average loan to value

(“LTV”) ratio was relatively low at 64.70%.

As of the Cutoff Date, the weighted average

seasoning was 19.28 months, which is

relatively long, indicating a decreased

default probability of the whole pool in later

periods.

2. There is no interest mismatch between the

underlying assets and the Senior Notes (both

are fixed rate).

3. As of Cutoff Date, the highest outstanding

principal amount for any single borrower

was 0.21% of the total principal balance and

the highest outstanding principal amount for

any province was 13.29% of the total

principal balance. The asset pool was well

diversified.

4. Overcollateralization and the Cash Collateral

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Account provide good credit enhancement

for the Senior Notes.

Concerns and Mitigants

1. Interest rate is fixed for all loans. If the PBoC

benchmark interest rate decreases, the

prepayment rate of the underlying asset pool

may go up, which may lead to a decrease in

the total interest payments received from

borrowers. This may in turn increase the

probability of default for the rated Senior

Notes.

Mitigants： Prepayment penalty of 3% is

imposed by Volkswagen Finance (China) Co.,

LTD for any prepaid principal amount. The

relative long seasoning of the asset pool

implies a low prepayment rate. In addition,

Lianhe has performed stress-testing for

different prepayment scenarios and the result

shows that Senior Notes can tolerate higher

prepayment rates.

2. The payment priority indicates that it is

possible principal payments on the Class B

Notes or the Subordinated Notes be made

before the principal of the Class A Notes is

fully paid down.

Mitigants ： A high Targeted

Overcollateralization Percentage is required

for the Class A and Class B Notes. Only after

payments to Senior Notes reach the targeted

balances, amortization of junior classes start.

Lianhe has performed stress tests for different

cashflow collection scenarios and the rating

results have considered issues caused by such

a payment structure.

3. Since auto loans do not have a long history in

China and historical data is not sufficient,

modeling/assumption risk may exist in the

quantitative analysis.

Mitigants：Lianhe has performed various

stress tests in our tranching and cashflow

models, which include increasing the

probability of default, decreasing the

recovery rate and increasing the prepayment

rate, to minimize the potential impact of

modeling / assumption risk.

4. There is no generally accepted practice for

the transfer of security rights over

automobiles. In this transaction,

re-registration of title (from Originator to

Issuer) has not been completed upon closing,

which may result in operational risk and legal

risk.

Migitants：Lianhe has considered such risks

in our cashflow modeling and adjusted the

recovery rate assumption accordingly. In

addition, Lianhe will closely monitor the

servicing quality and the Originator’s

financial strength which are important to

mitigate such legal risk.

5. After experiencing a period of high growth,

the Chinese auto market has been stabilised

with intensified competition. In addition, a

few local governments are implementing

policies to limit automobile purchases. The

auto industry is facing excessive output and

structure adjustment pressure, which may

impose downward pressure on the

performance of the asset pool.

Migitants：Lianhe has considered such risks

in our analysis by raising the depreciation

ratio.

6. Systematic risks such as global economic

weaknesses and slowing domestic economic

growth will deteriorate the performance of

asset pool.

Migitants：Lianhe factored in such risks by

raising probability of default and lowering the

recovery rate in our cash flow analysis.

STRUCTURED FINANCE


Declaration

I All information used in this report is provided by the Originator

VOLKSWAGEN FINANCE (CHINA) CO., LTD. and the Issuer CITIC

TRUST CO., LTD. Lianhe Credit Rating does not guarantee the

authenticity, accuracy, and integrality of the information.

II Except for the credit rating clientage between Lianhe Credit Rating and

the Originator/the Issuer, Lianhe Credit Rating and the relative rating

analysts do not have other relationships, which can affect the

independence, objectivity, and impartiality of the rating process or

rating result, with the Originator/the Issuer.

III Lianhe Credit Rating and the relative rating analysts complied the due

diligence with field investigation and integrity, and have adequate

reasons to guarantee the report following the principle of authenticity,

objectivity, and impartiality.

IV Based on reasonable internal credit rating criteria and process, the rating

conclusion in this report made by Lianhe Credit Rating is independent

and is not affected by improper influence from the Originator/the Issuer

or other institutions or individuals.

V The points of view and conclusions in this report are for reference only

and are not the suggestions or conclusions for any investment decision.

VI The period of validity of this rating conclusion is the duration of

‘Volkswagen Finance (China) Co., LTD DRIVER CHINA ONE

TRUST ABS Notes’. Based on the conclusion of track rating, the credit

rating of this obligation may be modified during its period of validity.

China Lianhe Credit Rating Co., Ltd

[][]2014

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I Transaction Summary

The Originator, Volkswagen Finance (China)

Co., LTD (“VWFC”), entrusts a portfolio of

auto loans amounting to RMB798.26 Million

(with Aggregate Discounted Principal Balance

of RMB799.72 Million discounted at 8.47%)

to CITIC Trust Co., LTD (“CITIC Trust”).

CITIC Trust establishes “Volkswagen Finance

(China) Co., LTD Driver China One Trust

(Red Pool)” as a special purpose trust and

issues Class A notes, Class B Notes and

Subordinated Notes in the National Interbank

Bond Market backed by the trust assets.

Investors gain returns by holding these notes.

Table 1 Transaction Parties

Originator/Servicer： Volkswagen Finance (China)

Co., LTD

Issuer/Trust Company：CITIC Trust Co., LTD

Account Bank：Industrial and Commercial Bank of

China Limited Beijing Branch

Registry：China Central Depository & Clearing Co.,

Ltd

Financial Advisor：The Hongkong and Shanghai

Banking Corporation Limited

Lead Underwriter ： China International Capital

Corporation Limited

Rating Agency：China Lianhe Credit Rating Co., Ltd.

China Credit Rating Co., Ltd, China Chengxin

International Credit Rating Co., Ltd

Legal Advisors：Baker & McKenzie LLP, Llinks Law

Office

Accounting/Tax Advisor： PricewaterhouseCoopers

Zhong Tian LLP

Chart 1 Transaction Arrangement

The Class A Notes, Class B Notes and

Subordinated Notes pay monthly interest and

pass-through principal collections. Specifically,

cash inflow should be used to repay the Class A

Notes principal. Once the Targeted Class A Note

Balance1 is reached, the Class B Notes principal

1 Targeted Class A Note Balance means (a) except in the case of (b)

below, an amount equal to the excess of the Aggregate Discounted Principal Balance as at the end of the preceding Monthly Period over the Class A Targeted Overcollateralisation Amount, or (b) zero, if the Aggregate Discounted Principal Balance as at the end of the preceding Monthly Period is less than 10 per cent. of the Aggregate

Interest and PrincipalRepayment

Interest andPrincipal Repayment

Trust Agreement

Servicing Agreement

Account Agreement

Underwriting Agreement

Underwriting Syndicate Agreement

Note Interest and Principal

Note Interest and Principal

Conditions andAgency Agreement

Underwriting

VW Finance (Originator)

CITIC Trust (Originator/Trust)

Borrowers

VW Finance (Servicer)

ICBC (Account Bank)

CCDC (Registry/Agent)

CICC (Lead underwriter)

Underwriting Syndicate

Investors

Loan Contract

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gets paid subsequently. Once the Class B Notes

principal reaches the Targeted Class B Note

Balance2, interest and principal on Subordinated

Notes will get paid subsequently. The interest

rates on the Class A Notes, Class B Notes and

Subordinated Notes are fixed. Class A Notes and

Class B Notes will be issued via an auction

system and the Subordinated Notes will be issued

via private placement. Coupon interest rates will

be determined by the result of the auction.

Cutoff Date Discounted Principal Balance or if a Servicer Replacement Event occurs. Class A Targeted Overcollateralisation Amount means, on each Payment Date, the greater of (a) the Class A Overcollateralisation Percentage multiplied by the Aggregate Discounted Principal Balance as of the end of the preceding Monthly Period, and (b) the lesser of (i) RMB37.59Million(i.e.,4.7 per cent. of the Aggregate Cutoff Date Discounted Principal Balance), and (ii) the aggregate outstanding principal amount of the Class A Notes on such Payment Date. Class A Overcollateralisation Percentage will be explained later. 2 Targeted Class B Note Balance means (a) except in the case of (b),

the excess of the Aggregate Discounted Principal Balance as at the end of the preceding Monthly Period over the aggregate outstanding principal amount of the Class A Notes (after giving effect to all payments and distributions on such date) and the Class B Targeted Overcollateralisation Amount or (b) zero, if the Aggregate Discounted Principal Balance as at the end of the preceding Monthly Period is less than 10 per cent. of the Aggregate Cutoff Date Discounted Principal Balance or if a Servicer Replacement Event occurs. Class B Targeted Overcollateralisation Amount means, on each Payment Date, the greater of (a) the Class B Overcollateralisation Percentage multiplied by the Aggregate Discounted Principal Balance as of the end of the preceding Monthly Period, and (b) the lesser of (i) RMB8.80Million (i.e., 1.1 per cent. of the Aggregate Cutoff Date Discounted Principal Balance), and (ii) the aggregate outstanding principal amount of the Class B Notes on such Payment Date. Class B Overcollateralisation Percentage will be explained later.

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Table 2 Asset Backed Notes Summary

Amount (RMB 10K)

% Interest Rate Type

Expected IR(%)

Rating Interest Payment

Frequency

Principal Repayment

Expected Weighted Average

Life

Scheduled Maturity Date

A 69,900.00 87.41 Fixed [ ] AAA Monthly Pass through 0.59 ys August 26, 2018

B 4,400.00 5.50 Fixed [ ] A+ Monthly Pass through 1.38 ys August 26, 2018

Sub Notes 5,272.39 6.59 Fixed [ ] NR Monthly Pass through 1.12 ys August 26, 2018

OC 399.86 0.50

II Transaction Structure

Available Credit Enhancement mechanism for this

transaction includes a Senior/Junior Structure，

Overcollateralization,Targeted

Overcollateralisation Amount, Cash Collateral

Account, Monthly Collateral Account and Trigger

Events.

1．Accounts

On or before the Closing Date, CITIC Trust shall

open Cash Collateral Account, Monthly Collateral

Account, and Distribution Account with ICBC

Beijing branch.

Amount in Cash Collateral Account is used as

collateral to mitigate the risks associated with any

Servicer Utilization Event.3. The Issuer shall on

the Issue Date deposit a sum equal to one point

two per cent (1.2%) of the Aggregate Cutoff Date

Discounted Principal Balance into the Cash

Collateral Account, which serves as the Initial

Cash Collateral Amount. After that the amount in

Cash Collateral Account will gradually decrease

to a level equal to one per cent (1%) of the

Aggregate Cutoff Date Discounted Principal

Balance. So long as no Servicer Utilization Event

remains outstanding, on each Payment Date, the

Issuer shall transfer the excess of (a) the credit

balance of the Cash Collateral Account on such

Payment Date over (b) the then applicable

Specified Cash Collateral Account Balance4 to the

3 Servicer Utilization Event：Any Servicer Replacement Event or

Servicer Disruption Event. 4 Specified Cash Collateral Account Balance：on each Payment Date,

the higher of (a) one per cent. (1%) of the Aggregate Cutoff Date

Originator. If the Servicer Utilization Event has

been triggered and the Cash Collateral Amount

has been utilized, the Servicer shall, on the

Deposit Date immediately after the date falling

thirty (30) days from the date of the remedy,

transfer and deposit all or part of the Collections

during the previous Collections Period or the

relevant Monthly Collections to the Cash

Collateral Account so that the credit balance of

the Cash Collateral Account is replenished and

maintained at a level equal to the Specified Cash

Collateral Account Balance. After the Cash

Collateral Account has been closed, the

Originator is entitled to any Loan Receivables

still to be collected.

The Monthly Collateral Account is used to

mitigate commingling risk. The Servicer deposits

a certain amount into Monthly Collateral Account.

If the Servicer’s credit rating reach Servicer

Required Rating ((a) in relation to the CCXI

rating system, the A class; (b) in relation to the

China Ratings rating system, the A- class; or (c)

in relation to the Lianhe rating system, the A class)

or above, the amount deposited is zero (0). If the

credit rating of the Servicer is below Servicer

Required Rating, the Servicer should deposit its

own funds into the Monthly Collateral Account

every half a month as a guarantee for monthly

collection.

Discounted Principal Balance and (b) one point two per cent. (1.2%) of the outstanding Aggregate Discounted Principal Balance as of the immediately preceding Calculation Date.

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Cash inflows into the Distribution Account come

from monthly collections. If the Servicer’s credit

rating is ‘A’ or above, it shall make a deposit of

such monthly collections into the Distribution

Account once a month. If its credit rating falls

below ‘A’, the Servicer should transfer collections

to the Distribution Account every half a month

according to relevant arrangements.

2．Order of Priority

The order of priority differs depending on

whether there is a Foreclosure Event.

Foreclosure event means any of the following

events: (i) with respect to the Issuer, an

Insolvency Event occurs; or (ii) the Issuer

defaults on the payment of any interest on the

Controlling Notes then outstanding when the

same becomes due and payable, and such default

continues for a period of ten (10) Business Days

(or such longer period as approved at a

Controlling Noteholders’ Meeting); (iii) the Issuer

defaults in the payment of principal of any Note

for a period of ten (10) Business Days from the

Final Maturity Date (or such longer period as

approved at a Controlling Noteholders’ Meeting),

provided that it shall not be a Foreclosure Event

until after a decision has been made by

unanimous consent at the relevant Controlling

Noteholders’ Meeting that the replacement of the

Issuer with another Trust Company which meets

the Trust Company Qualified Standard is not

viable.

(1) Prior to the occurrence of a Foreclosure

Event

In accordance with transaction clauses, the

amount in Distribution Account should be

distributed in such order: amounts payable by the

Issuer in respect of taxes, fees and expenses

payable to transaction parties, Servicer fee

payable to the Servicer, interest accrued and

interest shortfalls (if any) on the Class A Notes,

interest accrued and interest shortfalls (if any) on

the Class B Notes, principal payment to the Class

A Notes until the outstanding principal amount of

the Class A Notes equal to the Targeted Class A

Note Balance, principal payment to the Class B

Notes until the outstanding principal amount of

the Class B Notes equal to the Targeted Class B

Note Balance, accrued and unpaid interest on the

Subordinated Notes, principal amounts until the

aggregate principal amount of the Subordinated

Notes is reduced to zero, any residual to the

Originator. The order of priority prior to a

Foreclosure Event is presented in Appendix Chart

1.

(2) Following the occurrence of a Foreclosure

Event

Upon occurrence of a Foreclosure Event, the

distribution order will be changed to such order:

amounts payable by the Issuer in respect of taxes,

fees and expenses payable to transaction parties,

the Servicer fee payable to the Servicer, interest

accrued and interest shortfalls (if any) on the

Class A Notes, principal payment to the Class A

Notes until the Class A Notes are repaid in full,

interest accrued and interest shortfalls (if any) on

the Class B Notes, principal payment to the

Class B Notes until the Class B Notes are repaid

in full, accrued and unpaid interest on the

Subordinated Notes, principal amounts until the

aggregate principal amount of the Subordinated

Notes is reduced to zero (0), any residual to the

Originator. The order of priority following a

Foreclosure Event is presented in Appendix Chart

2.

3．Credit Enhancement Arrangement

The available credit enhancement mechanism for

this transaction includes the Senior/Suboridnated

Structure ， Overcollateralization, Targeted

Overcollateralisation Amount, Cash Collateral

Account, Monthly Collateral Account and Trigger

Events.

(1) Senior/Subordination Structure

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Backed by the same asset pool, the notes are

divided to 3 tranches, Class A Notes, Class B

Notes and Subordinated Notes. Collection and

return on reinvestment are distributed in

accordance with the order of priority. Junior

classes serve as loss protection for senior classes.

(2) Overcollateralisation

Discounted at 8.47%, the total value of Class A

Notes, Class B Notes and Subordinated Notes

accounts for 99.5% of Aggregate Discounted

Principal Balance as of the Cutoff Date. The

remaining 0.5% overcollateralisation provides

additional credit enhancement to the Class A,

Class B and Subordinated Notes

(3) Targeted Overcollateralisation Amount

Depending on the performance of the asset pool,

different Targeted Overcollateralization

Percentages will be in effect. Until the

overcollateralization level reaches this Targeted

level for the Senior Notes, Subordinated Notes

will not get paid. Specifically, (i) if the

Cumulative Gross Loss Ratio5 exceeds (a) 0.5 per

cent for any Payment Date prior to or during

March 2015; or (b) 1.15 per cent for any Payment

Date from April 2015 but prior to or during

November 2015, the Class A Overcollateralisation

Percentage will be 49%, Class B

Overcollateralisation Percentage will be 15%; (ii)

if the Cumulative Gross Loss Ratio exceeds 1.6

per cent. for any Payment Date, Class A and Class

B Overcollateralisation Percentage will be 100%;

(iii) for other conditions except condition (i) and

condition (ii), the Class A Overcollateralisation

Percentage will be 47% and the Class B

Overcollateralisation Percentage will be 11%.

Higher Overcollateralisation Percentages provide

solid credit enhancement and better protection for

5 Cumulative Gross Loss Ratio = the sum of the discounted principal

balances of all Loan Receivables (including Loan Receivables which were not received on time or remain to be paid in the future) that were terminated by the Servicer in accordance with its customary practice from time to time from the Cutoff Date through the end of the preceding Monthly Period/ the Aggregate Cutoff Date Discounted Principal Balance

Senior Notes.

(4) Cash Collateral Account

The Cash Collateral Account provides liquidity

support and credit enhancement for Senior Notes

if a Servicer Utilization Event occurs.

(5) Monthly Collateral Account

If the Servicer’s credit rating reach Servicer

Required Rating or above, the amount deposited

in Monthly Collateral Account is zero (0). If the

credit rating of the Servicer is below Servicer

Required Rating, the Servicer should deposit its

own funds into the Monthly Collateral Account

every half a month as a guarantee for monthly

collection. Monthly Collateral Account services

for mitigating commingling risk.

(6) Trigger events

If a Foreclosure Event occurs, the order of

priority will be rearranged as presented in

Appendix Chart 2. This trigger mechanism

mitigates event risk and provides credit

enhancement for the Senior Notes.

(7) Clean-up Call

The Originator shall have the right, at its option,

to exercise a Clean-up Call and to repurchase the

loan receivables pursuant to a Clean-up Call

repurchase agreement so long as the Aggregate

Discounted Principal Balance is less than ten per

cent. of the Aggregate Cutoff Date Discounted

Principal Balance.

The Clean-up Call is at Originator’s option, and

hence it does not constitue a credit enhancement

for the Senior Notes.

4．Risk Analysis

(1) Set-off risk & Commingling risk

When borrowers have deposits within VWFC,

they may set-off their obligations using deposited

amounts if VWFC goes bankrupt. The execution

of set-off rights will decrease the monthly

collections available for the transaction.

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Whilst VWFC is not a deposit-taking entity, in

order to further address any potential set-off risk,

the Originator sets a specific critierion for

Purchased Loan Receivables. i.e. the Purchased

Loan Receivables are free of defences, whether

peremptory or otherwise, for the agreed term of

the Loan Contracts as well as free of rights of

third parties and that the Borrowers in particular

have no set-off claim thereto or thereunder and

the status and enforceability of the Purchased

Loan Receivables is not impaired by set-off rights.

Therefore, no set-off risk exists in this transaction.

When the Servicer becomes insolvent, collections

may be commingled with VWFC’s other funds,

leading to a decrease in the available monthly

collections.

The Monthly Collateral Account is set up to

mitigate such commingling risk. If the credit

rating of the Servicer is below Servicer Required

Rating, the Servicer should deposit from its own

funds an amount which equals the expected

collection into the Monthly Collateral Account

twice a month as a guarantee for actual monthly

collection.

Considering that the Originator and Servicer

maintain a high credit rating and the creation of a

Monthly Collateral Account upon downgrade,

Lianhe believes that set-off risk and commingling

risk for this transaction is limited.

(2) Prepayment and delinquency

Notes issuing amount is calculated by Discount

Rate, which consists of senior expenses and

weighted average coupon rates. If coupon rates

are relatively low, leading to a relatively low

Discount Rate, it is probable that the Aggregate

Cutoff Date Discounted Principal Balance is

higher than outstanding principal balance of total

loans. In this case, an extremely high prepayment

rate may cause the insolvency of the Senior Notes.

Addtionally, a relatively high prepayment rate

will allow collections to be used to redeem junior

notes and pay the Originator after having paid to

Senior Notes a target amount as provided for

under the structural arrangement in this

transaction. This may result in an adverse effect to

the ability to redeem Senior Notes during later

periods. In addition, delinquency will lead to

liquidity risk.

Lianhe used different prepayment and

delinquency scenarios to perform cash flow tests.

The results show that Senior Notes can be

redeemed in full under various stress scenarios.

(3) Liquidity Risk

Liquidity risk results from the mismatch between

cash flow from asset pool and interest due on the

Senior Notes.

Monthly collections consist of interest collections

and principal collections which, along with cash

collateral account, mitigate liquidity risk.

Satisfied by the results from cash flow analysis

under different scenarios, Lianhe believes that the

transaction structure mitigates liquidity risk

effectively.

(4) Reinvestment Risk

During each payment period, monthly collections

can be used to invest, which introduces

reinvestment risk.

Trust Agreement sets criteria for permitted

investment. Investment should be denominated

and payable in RMB; such investment may only

be made in deposits with Permitted Entities, in

national bonds or in interbank policy-driven

financial bonds at least with AAA rating of the

Rating Agencies and (if available) an international

long-term issuer default rating of at least "A-" by

Fitch and an international short-term issuer

default rating of at least "F2" by Fitch; the Issuer

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shall not purchase any of the Notes. Strict

permitted investment criteria will reduce

reinvestment risk. Lianhe declares that

reinvestment risk is limited.

III Asset Pool

1．Asset pool summary

The asset pool contains 13,696 auto loans. As of

the Cutoff Date of March 31 2014, the

outstanding principal balance of the pool was

RMB798.26 Million, and the aggregate

discounted principal balance was RMB799.72

Million. The asset pool summary is presented in

Table 3:

Table 3 Asset pool statistic data summary on Cutoff

Date

Outstanding principal balance (RMB10K) 79,826.32 Aggregate discounted principal balance (RMB10K) 79,972.25 Discount rate (%) 8.47 Number of loans 13,696 Weighted average age of borrowers 37.69 Weighted average seasoning (Month) 19.28 Weighted average initial LTV (%) 64.70 Weighted average current LTV (%) 36.45 Max.single loan balance (RMB10K) 171.00 Max single borrower loan balance (RMB 10K) 171.00 Av. Loan balance (RMB10K) 5.83 Av. Contract amount (RMB10K) 13.30 WA. Loan interest rate (%) 8.57 WA. Original term (Month) 35.70 WA. Remaining term (Month) 16.42 NB：1、Weight used in the table is the principal balance as of the

Cutoff Date.

2、WA. Current LTV = Outstanding principal balance/Current

value of the auto. Current value of the auto = Initial value of the auto

× (1 - depreciation ratio).

2．Purchased Loan Receivables

In accordance with Trust Agreement, the criteria

for loan receivables, as Cutoff Date, are as

follows:

The first set of criteria is in relation to borrowers:

none of the Borrowers are an affiliate of

Volkswagen AG or an employee of the Originator;

the Loan Contracts have been entered into

exclusively with the Borrowers which, if they are

corporate entities have their registered office in

China or, if they are individuals have their place

of residence in China; the total outstanding

amount of Purchased Loan Receivables entrusted

hereunder pursuant to the Loan Contracts with

one and the same Borrower does not exceed RMB

4,000,000 in respect of any single Borrower; and

so on.

The second set of criteria is in relation to loans:

the Purchased Loan Receivables are “normal”

loans according to CBRC’s “5-category” loan

classification method; no Purchased Loan

Receivable is overdue; the status and

enforceability of the Purchased Loan Receivables

is not impaired due to warranty claims or any

other rights of the Borrower; all Financed Objects

are insured with the Originator named as the sole

loss payee during the first year of the term of the

relevant loan; each Loan Contract under which

the relevant Loan Receivable arises provides for a

mortgage of the relevant Financed Object; on the

Cutoff Date, at least two contractual instalments

(which include interest payments) have been paid

in respect of each of the Purchased Loan

Receivables and that each Purchased Loan

Receivable requires substantially equal monthly

payments to be made within sixty months of the

date of origination of each Loan Contract and

may also provide for a final balloon payment;

each of the Purchased Loan Receivables will

mature no earlier than six months and no later

than sixty months after the Cutoff Date; and so

on.

The third set of criteria is in relation to loan

contracts: the Loan Contracts shall be governed

by the laws of China and have not been concluded

prior to January 2008; according to the

Originator’s records, no termination of any Loan

Contract has occurred or is pending; no

insolvency proceedings have been initiated

against any of the Borrowers during the term of

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the relevant Loan Contract up to the Cutoff Date;

and so on.

Legal advisors have performed due diligence on a

sample portfolio. Sampled loans meet the

eligibility criteria specified in the Trust

Agreement. Relevant Loan Contracts and legal

documents related to asset pool are also in

compliance.

3．Asset Analysis

The probability of default and the recovery rate of

asset are affected by various characteristics of

underlying assets, including the credit quality of

loans, borrowers’ credit record, car prices and the

existence of auto insurance.

Loans

The average principal balance of loans is

RMB58.3K. The weighted average initial LTV

and the weighted average LTV as of the Cutoff

Date was 64.70% and 36.45%, respectively.

Initial LTVs are presented below:

Table 4 Initial LTV

Initial LTV Number Amount (RMB10K)

Percentage (%)

(10%，20%] 6 8.47 0.01 (20%，30%] 95 121.11 0.15

(30%，40%] 491 1,350.97 1.69 (40%，50%] 1,555 6,451.34 8.08 (50%，60%] 2,209 13,974.26 17.51 (60%，70%] 9,313 57,711.09 72.30 (70%，80%] 27 209.08 0.26

Total 13,696 79,826.32 100.00 NB: Except where otherwise stated, “Percentage” in this report means

OPB divided by total amount of asset pool

Generally speaking, the lower the LTV is, the

lower the probability of default. The initial LTV

for this transaction lies between 60% and 70%,

standing for a normal level. It should be

highlighted that LTV as of the Cutoff Date is

much lower than the initial one.

The asset pool consists of two types of loans,

equal installment loan and balloon loan. Their

shares in the pool are as follows:

Table 5 Loan type Loan type Number Amount

(RMB10K) Percentage

(%)Equal installmentt 13,549 78,726.95 98.62

Balloon 147 1,099.38 1.38 Total 13,696 79,826.32 100.00

In general, due to a relatively large payment due

in the last period for balloon loans, borrowers are

more likely to default. Considering this

characteristic, Lianhe adjusts the probability of

default upwards.

The weighted average contract term, remaining

term and seasoning for this transaction are 35.70

months, 16.42 months and 19.28 months,

respectively. Distribution of seasoning is as

follows:

Table 6 Seasoning

Seasoning (month)

Number Amount (RMB10K)

Percentage (%)

Less than 6 0 0.00 0.00 (6，12] 99 1,508.07 1.89

(12，18] 6,850 43,544.48 54.55 (18，24] 2,893 19,730.56 24.72 (24，36] 3,496 14,014.04 17.56 (36，48] 259 886.00 1.11

(48，60] 99 143.17 0.18 Total 13,696 79,826.32 100.00

Based on the analysis of historical data, most of

auto loans default between the 6th month and 18th

month after loan origination. Table 6 shows that

loans with seasoning below 18 months account

for 56.44% of total assets, which is relatively high.

Our analysis for default probability has

considered such adverse effect.

As of the Cutoff Date, all loans are normal loans,

and there are no delinquencies as of the Cutoff

Date. The historical performance of asset pool is

good.

Individual borrowers represent 95.06% of OPB,

consisting of 13,291 loans, while corporate

borrowers have 405 loans, accounting for 4.94%

of OPB. Individual borrowers represent the

majority of the pool.

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The weighted average age of individual borrowers

is 37.69, implying most borrowers are in their

stable stage of career development with stable

income. Borrowers’ age distribution is presented

in Table 7

Table 7 Age of Borrowers

Age Number Amount (RMB10K)

Percentage (%)

(18，20] 2 6.94 0.01 (20，30] 2,907 14,370.73 18.94

(30，40] 5,683 30,831.65 40.63 (40，50] 3,606 23,483.63 30.95

Superior to 50 1,093 7,190.18 9.48 Total 13,291 75,883.13 100.00

The status of the economic development and cost

of living in areas where borrowers reside are also

key factors affecting borrowers’ repayment ability.

Geographic distribution for the asset pool is well

diversified as presented in Table 8:

Table 8 Top 10 provinces with the most OPB

Province Number Amount (RMB10K)

Percentage (%)

Shandong 1,987 10,612.63 13.29 Inner Mongolia 1,323 7,885.90 9.88

Fujian 1,017 6,215.00 7.79 Henan 1,007 6,187.18 7.75 Hebei 1,088 4,877.62 6.11

Jiangsu 563 4,827.67 6.05 Shanxi 615 3,849.18 4.82

Heilongjiang 555 3,737.47 4.68 Zhejiang 492 2,643.55 3.31

Anhui 262 2,635.17 3.30 Total 8,909 53,471.36 66.98

Vehicle Value

Within all underlying vehicles in the pool, new

cars represent 99.74%. The initial value of

vehicles is presented as follows:

Table 9 Initial value of vehicles

Initial value (RMB 10K)

Number Amount (RMB10K)

Percentage (%)

Less than 10 3,005 5,186.85 6.50 10 - 20 5,388 20,028.47 25.09 20 - 30 3,122 20,690.70 25.92 30 - 40 784 7,822.28 9.80 40 - 50 659 8,831.52 11.06

Superior to 50 738 17,266.50 21.63 Total 13,696 79,826.32 100.00

Vehicle brand distribution as shown in Table 10:

Table 10 Vehicle brand

Brand Number Amount (RMB10K)

Percentage (%)

VW 10,490 41,477.98 51.96 Audi 1,698 23,317.96 29.21

VW import 875 10,616.48 13.30 Porsche 58 2,360.82 2.96 Skoda 397 1,287.06 1.61

Bentley 2 240.24 0.30 Seat 1 2.67 0.00

Others 175 523.10 0.66 Total 13,696 79,826.32 100.00

VW’s own brands contribute most of the pool,

helping the Servicer to conduct its servicing duty,

and providing some credit comfort to the

transaction. It should be highlighted that

re-registration of title (from Originator to Issuer)

has not been completed upon closing, which may

result in operational risk and legal risk. Lianhe

will closely monitor the servicing quality and the

Originator’s financial strength which are

important to mitigate such legal risk.

Insurance

All collateral autos involved in this transaction

are insured. The insurance includes, but not limits

to, property insurance under the name of borrower

with the Originator named as the sole loss payee.

IV Necessary credit enhancement and Cash flow analysis

Based on historical data provided by VWFC,

Lianhe sets benchmark default probability after

modest adjustments. Taking into account for both

domestic auto market and rating practices in

comparable APAC emerging markets, Lianhe also

sets a referenced depreciation ratio. Combining

characteristics presented in this transaction with

the two benchmarks noted above, Lianhe makes

some final adjustments so that the final

parameters used are suitable for this transaction.

1．Default Probability

By analyzing factors that cause loan default,

Lianhe concludes that initial LTV is the most

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relevant factor affecting default probability.

Based on historical data provided by VWFC and

asset pool’s characteristics, Lianhe chooses initial

LTV as a base variable to measure the benchmark

of default probability and sets the benchmark

default probability in terms of different LTVs.

Based on each loan’s characteristics (seasoning,

borrowers’ credit scoring, delinquency, age,

location, loan type etc.). Lianhe makes some

adjustments to the benchmark default probability

according to loan characteristics.

It should be noted that although borrowerincome

and debt obligations are key factors for loan

underwriting, considering the accessibility and

accuracy of relevant data, Lianhe made no

adjustment on the debt/income ratio.

(1) Benchmark of default probability

Based on static loan portfolio data provided by

VWFC, Lianhe classified initial LTV into groups

and estimated the benchmark of default

probability for each group.

Default probability noted above is calculated

during the period when the auto market is

experiencing a boom. In addition, a defaulted loan

is able to be moved back to the normal loan

category under the current CBRC’s “5-category”

loan classification regime. (Note: under the

current CBRC “5-category” loan classification

regime, if all outstanding principal and interest of

a defaulted loan is repaid, the loan may be moved

back to “normal” loan category). Therefore,

Lianhe adjusts benchmark of default probability

upwards.

(2) Adjustment factors

Borrower’s credit scoring: Close relationship

exists between default probability and credit

scoring. The lower borrower’s credit scoring is,

the higher the default probability.

Seasoning: According to our experience, most of

auto loans default between the 6th month and 18th

month after loan origination. If a borrower has a

normal repayment track record, the borrower is

less likely to default during later periods. Lianhe

made adjustments on default probability in terms

of different seasoning.

Delinquency: Loans that have been delinquent

before are more likely to default than normal

loans.

5-category classification: Loans not in the normal

category are more likely to default than normal

loans.

Borrower’s age: If a borrower is less than 30,

Lianhe thinks his/her income is not stable. So we

adjust the default probability upwards.

Geography: Due to different economic situations,

legal infrastructure and behavioral habits, default

probability differs in different areas. Liahhe

adjusts default probability upwards for areas with

a high non-performing loans ratio.

Loan type: The asset pool includes balloon loans

which require a large repayment in the last period.

Considering borrowers’ pressure on the last

repayment, Liahhe adjusts default probability

upwards for balloon loans.

Systematic risk is increasing due to recent global

economic weaknesses and a slowing domestic

economic environment. Meanwhile, the domestic

auto industry is turning from booming to stable,

and a few local governments are already

implementing policies to limit automobile

purchases. All these factors contribute towards the

auto industry facing excessive output and prone

for structural adjustments. As for the Originator,

VWFC has demonstrated a relatively high level of

standards on loan servicing and risk management.

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Lianhe has considered all these factors in our

analysis on default probability.

2．Loss Rate

Measurement of loss given default focuses on

probable loss due to disposal of pledges. Loss

includes consideration on loan balance, order of

claim, value of autos, and fee in relation to

enforcement and interest accrued during

execution period.

(1) Auto market and auto depreciation ratio

After experiencing high growth rate for several

years, the domestic auto market is entering a

stable period. Considering the macroeconomic

environment and uncertainty within the auto

industry, Lianhe uses 55% as an auto’s

depreciation ratio (auto used for less than one

year) for notes with a targeted rating of AAA, and

42% for notes with a targeted rating of A+.

(2) Cost of disposal and interest during the

period of disposal

After loan default, different Servicers express

different willingness to dispose defaulted assets,

which results in difference in disposal time and

cost. Based on VWFC’s experience and historical

data, Lianhe sets a benchmark for disposal time

and cost.

3．Necessary credit enhancement and Cash

flow analysis

Based on an estimation on default probability and

recovery, Lianhe measured the loss rate for

targeted ratings: 10.53% for a targeted rating of

AAA and 3.32% for a targeted rating of A+.

Following this transaction structure and order of

priority, Lianhe built a cash flow model for this

rating analysis. Using different prepayment

assumptions, default distribution assumptions and

interest rate assumptions, Lianhe tested the

redemption profile of the Senior Notes under

these stressed scenarios. The results show that

Senior Notes perform well under our

stress-testing.

V Originator/Servicer

The Originator/Servicer is VWFC, founded on

August 30 2004, with registered capital of RMB3

billion. Volkswagen Financial Service AG in

Germany is its sole shareholder.

At the end of 2013, VWFC’s total assets

amounted to RMB26.19 billion. Equity was

RMB3.53 billion whilst its non-performing loan

ratio stood at 0.45%. VWFC generated operating

income of RMB1226 million and net profit of

RMB346 million. As of the end of 2013, VWFC’s

capital adequacy ratio was 14.90% and core

capital adequacy was 13.80%. Summary financial

figures from 2011 to 2013 are presented in Table

11:

Table 11 VWFC Financial Indicator

(RMB100 Million/%)

Indicator 2013 2012 2011

Total assets 261.86 193.26 113.20

Net assets 35.32 31.85 10.21

Income 12.26 8.38 4.57

Net profit 3.46 1.64 0.76

Net cash flow from operation activities -9.75 -5.49 0.65

Non-performing loans ratio 0.45 0.93 0.37

Provision coverage ratio 305.00 190.09 343.09

Capital adequacy ratio 14.87 19.46 10.10

Core capital adequacy ratio 13.78 18.23 9.10

Average return on assets 1.52 1.07 0.82

Average return on net assets 10.32 7.82 7.74

Individual auto loan is the key business of VWFC.

Business process includes loan application, loan

approval, loan underwrite and loan management.

As for dealers risk management, VWFC required

that dealers must be authorized ones and they

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accept VWFC’s risk management process.

All in all, VWFC has a strong financial statement,

good asset quality and relatively strong risk

management ability. Lianhe declares that the

probability of Servicer Replacement Event is

relatively low and as the Originator and Servicer,

VWFC can bear their responsibility.

VI Trust Company/Issuer

The trust company and issuer is CITIC Trust Co.,

LTD (“CITIC Trust” for short). Founded in March

1988, CITIC Trust has registered capital of

RMB1.2 billion (including USD23 million). By

the end of 2013, CITIC Trust’s total assets

reached RMB14.89 billion and equity RMB13.03

billion. During 2013, CITIC Trust generated

operating income of RMB5.49 billion and a net

profit of RMB3.14 billion. CITIC Trust served as

securitization trust in 2005, 2008, 2012 and 2013.

CITIC Trust has solid experience in securitization,

stable financial status and robust internal controls.

Risks associated with CITIC Trust are deemed to

be limited in this transaction.

VII Account Bank

Industrial and Commercial Bank of China

Limited (“ICBC”) serves as account bank for this

transaction. As of the end of 2013, ICBC

possessed total assets of RMB18,917.75 billion,

with a non-performing loans ratio of 0.94%,

provision coverage of 257.19%, capital adequacy

ratio of 13.12% and core tier 1 capital adequacy

ratio of 10.57%. During 2013, ICBC made a net

profit of RMB262.97 billion. With RMB1,395.79

billion under custody within its Beijing branch

until September 2013, ICBC is a leading player

in the domestic market in custody scale, service

and products.

ICBC has a well-developed fund custody process,

a robust risk management and an advanced IT

system. Operational risk rising from the account

bank is limited.

VIII Legal and other factors

A series of laws and regulations have been

published, including Measures for Administration

of Credit Assets Securitization, Pilot Measures

for Supervision and Administration of Credit

Assets Securitization by Financial Institutions, to

rule specific operations in the creation of special

purpose trusts, transfers of credit asset from the

Originator to special purpose trusts, and the

validity of the transfers so as to uphold the same

against borrowers and third parties, etc.

The legal opinion that Lianhe has received states

that the establishment of trust is valid, that assets

under the trust are bankruptcy remote from the

other assets of both of the Originator and the

Issuer, that claims on trust assets can upheld

against borrowers and the third parties effectively.

It should be noted that there has not been a

generally accepted rule of practice for the transfer

of claims on mortgage over automobiles in China.

In this transaction, the mortgage over vehicles

has been transferred from the Originator to the

Issuer but the mortgage update registration has

not been effected, which may result in certain

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legal risk.

The accounting opinion letter indicates that

VWFC should combine the statements of the

“Volkswagen Finance (China) Co., LTD Driver

China One Trust” ,and will continue to confirm

the assets and liabilities based on the degree of its

continued involvement in the trust assets. this

transaction is stamp duty exempted and realizes

tax neutral status.

Due to the pilot period, relevant laws and

regulations related to securitization are in the

process of being improved and may be modified.

Lianhe will keep monitoring related participants’

duties and operational risks involved. With the

successful issuance of several securitization

products, Regulators and key participants have

become more experienced and are continuing to

improve their ability to, prevent and mitigate risk.

IX Final Rating

Having considered the asset pool, transaction

structure, legal factors and participants’

operational risk, based on credit analysis on the

asset pool and cash flow analysis, Lianhe declares

ratings for Volkswagen Finance (China) Co., LTD

DRIVER CHINA ONE TRUST ABS Notes:

Class A Notes rated AAA, Class B Notes rated A+,

Subordinated Loan not rated.

The Class A Notes’ rating indicates that the Notes

have an extremely strong ability to meet their

financial commitment and have very low

probability of default. The Class B Notes’ rating

indicates that the Notes have a strong capacity to

meet its financial commitment and have a low

probability of default.

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Appendix Order of Priority

Chart 1 Order of priority prior the occurrence of a Foreclosure Event

Replenishing the cash collateral account 1. Amounts payable by the Issuer in respect of taxes 2. Fee and expense payable to institutional participants 3. The servicer fee payable 4. Interest accrued and interest shortfalls (if any) on the Class A Notes 5. Interest accrued and interest shortfalls (if any) on the Class B Notes 6. An aggregate amount to the Class A until the outstanding principal amount of the Class A Notes equal to the Targeted Class A Note Balance 7. An aggregate amount to the Class B until the outstanding principal amount of the Class B Notes equal to the Targeted Class B Note Balance 8. Accrued and unpaid interest on the Subordinated Notes 9. Principal amounts until the aggregate principal amount of the Subordinated Notes is reduced to zero 10. Remaining excess to the Originator

Available Distribution Amount Return on reinvestment

Cash Collateral Account

Occurrence of Service Utilization Event, replenishing the payment order from 1- 5

On Scheduled Repayment Date or auto loans are fully paid down, distributing to payment order from 6-10 After all payment due are satisfied and all creditors are reimbursed, residual returns to the Originator

Collection from asset

Initial Cash Collateral Amount form the Originator

Monthly Collateral Account

Monthly Collateral from the Servicer

If the credit rating of the Servicer is below Servicer Required Rating, the Servicer should deposit its own funds into the Monthly Collateral Account

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Chart 2 Order of priority following the occurrence of a Foreclosure Event

Occurrence of a foreclosure event

1. Amounts payable by the Issuer in respect of taxes

2. Fee and expense payable to institutional participants 3. The servicer fee payable 4. Interest accrued and interest shortfalls (if any) on the Class A Notes 5. The Class A Notes in respect of principal until the Class A Notes are redeemed in full 6. Interest accrued and interest shortfalls (if any) on the Class B Notes 7. The Class B Notes in respect of principal until the Class B Notes are redeemed in full 8. Accrued and unpaid interest on the Subordinated Notes 9. Principal amounts until the aggregate principal amount of the Subordinated Notes is reduced to zero 10. Remaining excess to the Originator

Available Distribution AmountCollection from asset pool Return on reinvestment

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Appendix A Definition of Credit Ratings

Lianhe Credit Rating applies a three-grade rating system, which is subdivided into nine ratings to

collateralized debt obligations, specifically, AAA, AA, A, BBB, BB, B, CCC, CC, C. Each grade except

AAA and grades below CCC (included) can be adjusted by a notch with ‘+’ or ‘-’, meaning rating a little

higher or lower. Descriptions of each rating are displayed in the following table.：

Grades and Ratings Definition

Investment

Grade

AAA

The highest rating assigned by Lianhe Credit Rating. The obligor has

extremely strong capacity to meet its financial commitment and has the lowest

probability of default.

AA The obligor has very strong capacity to meet its financial commitment and has

a very low probability of default.

A

An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of

changes in circumstances and economic conditions than obligations in

higher-rated categories. However, the obligor has a strong capacity to meet its

financial commitment and has a low probability of default.

BBB

An obligation rated ‘BBB’ exhibits adequate protection parameters. However,

adverse economic conditions or changing circumstances are more likely to

lead to a weakened capacity of the obligor to meet its financial commitment

on the obligation. 'BBB' is the lowest rating of investment grade.

Speculative

Grade

BB

An obligation rated ‘BB’ faces major ongoing uncertainties or exposure to

adverse business, financial, or economic conditions, which could lead to the

obligor's inadequate capacity to meet its financial commitment on the

obligation. The probability of default of 'BB' rated obligation is high.

B

An obligation rated ‘B’ is dependent on favorable business, financial, or

economic conditions to meet the obligors’ financial commitment. The

probability of default of 'B' rated obligation is very high.

CCC

An obligation rated ‘CCC’ is highly dependent upon favorable business,

financial, and economic conditions for the obligor to meet its financial

commitment on the obligation. The probability of default is extremely high.

CC An obligation rated ‘CC’ is currently highly vulnerable to nonpayment.

Default C Default is inevitable.

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Lianhe Credit Rating’s Surveillance Arrangement of

Volkswagen Finance (China) Co., LTD

DRIVER CHINA ONE TRUST ABS Notes The period of validity of this rating conclusion is the duration of Volkswagen Finance

(China) Co., LTD DRIVER CHINA ONE TRUST ABS Notes. From the day of

accomplishment of the rating report and during the validity period of Volkswagen Finance

(China) Co., LTD DRIVER CHINA ONE TRUST ABS Notes, the Originator / the Issuer

should timely provide Lianhe Credit Rating with surveillance documents including but not

limit to servicing report, trust company report, annual financial statements, and materials

that may affect the credit status of Volkswagen Finance (China) Co., LTD DRIVER CHINA

ONE TRUST ABS Notes. If there are significant changes of trust property or occurrence of

events that have significant influence to Volkswagen Finance (China) Co., LTD DRIVER

CHINA ONE TRUST ABS Notes, the Originator/the Issuer should inform Lianhe Credit

Rating and provide relative materials to us within 5 business days of the occurrence of the

changes or events.

Lianhe Credit Rating promises that during the validity period, Lianhe Credit Rating will do

surveillance regularly based on the materials provided by the Originator / the Issuer. If there

are significant changes of trust property or occurrence of events that have significant

influence to Volkswagen Finance (China) Co., LTD DRIVER CHINA ONE TRUST ABS

Notes, Lianhe Credit Rating will do surveillance from time to time, adjust and publish the

rating results timely.

If the Originator/the Issuer fail to timely provide Lianhe Credit Rating with regular or

non-regular surveillance documents, Lianhe Credit Rating will adjust and publish the rating

result of Volkswagen Finance (China) Co., LTD DRIVER CHINA ONE TRUST ABS Notes

based on the relevant information. If the Originator/the Issuer fail to timely provide Lianhe

Credit Rating with surveillance materials, which leads to the circumstance that Lianhe

Credit Rating cannot give rating results of Volkswagen Finance (China) Co., LTD DRIVER

CHINA ONE TRUST ABS Notes, Lianhe Credit Rating is entitled to withdraw its credit

rating.

According to relevant regulations, during the validity period of Volkswagen Finance (China)

Co., LTD DRIVER CHINA ONE TRUST ABS Notes, Lianhe Credit Rating will provide the

Originator, the Issuer and the competent department with surveillance report, and publish it

through specified media.

STRUCTURED FINANCE


Lianhe Credit Rating will designate an employee to keep contract with and provide the

relevant rating report to the Originator and the Issuer.

China Lianhe Credit Rating Co., Ltd. [][]2014

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