The rating outlook for U.S. financing and lease companies is stable for 2012 as the industry's improved operating profiles position them against economic uncertainties, according to Fitch Ratings.
 
The outlook includes issuers in both the consumer and commercial financing segments. Fitch believes that the industry is better equipped to navigate a gradual macroceconomic recovery and uncertainties stemming from the European debt crisis. Issuers in this sector generally have reduced leverage, improved credit performance from tightening underwriting loan standards, and improved operating leverage from significant cost-cutting initiatives.
 
Fitch expects commercial portfolios to rise, driven by further demand from developing countries and as issuers look to invest capital to refresh aging equipment/fleet. This could increase capital expenditures and reduce free cash flows but, ultimately, will lead to top-line growth.

Capitalization metrics should remain stable relative to historical standards given higher regulatory scrutiny and investor expectations stemming from an uncertain economic recovery. Leverage is expected stay at current levels and could rise modestly for issuers who de-levered during the past financial crisis and are currently operating below their internal leverage targets.
 
The full '2012 Outlook: U.S. Financing and Leasing Companies' is available at ' www.fitchratings.com '.