RPT-Fitch expects to rate Honda Auto Receivables 2013-2 Owner Trust; presale issued
April 15 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings expects to assign the following ratings to the Honda Auto Receivables 2013-2 Owner Trust notes:
--$283,000,000 class A-1 'F1+sf';
--$313,000,000 class A-2 'AAAsf'; Outlook Stable;
--$294,000,000 class A-3 'AAAsf'; Outlook Stable;
--$110,000,000 class A-4 'AAAsf'; Outlook Stable.
Key Rating Drivers
Strong Credit Quality: The credit quality of 2013-2, as measured by the weighted average (WA) Fair Isaac Corp. (FICO) score of 752 and internal credit score tiering, is consistent with 2013-1 and prior 2012 and 2011 pools. A major portion of the 2013-2 pool is subvented. New vehicles total 86.41% in 2012-3, consistent with prior transactions, and the pool has 12.61 months of seasoning.
Consistent Credit Enhancement Structure: The cash flow distribution is a sequential-pay structure, consistent with prior transactions. Initial hard credit enhancement (CE) is 2.75% (subordination of 2.50% and a 0.25% reserve). A yield supplement account (YSA) boosts the effective WA APR and, thus, excess spread (XS) is higher, which totals 2.25% in 2013-2.
Strong Portfolio/Securitization Performance: Losses and delinquencies on AHFC's portfolio and 2009-2012 securitizations are improved over those of 2006-2008, supported by strong credit quality, enhanced servicing policies, improvement in the economy (albeit volatile) and strong recovery rates.
Stable Corporate Health: Fitch rates AHFC 'F1' and its parent, Honda, 'F1/A' with a Stable Rating Outlook. AHFC has recorded positive corporate financial results in recent years, while the overall health of Honda has remained strong. Consistent Origination/Underwriting/Servicing: AHFC demonstrates capabilities as originator, underwriter, and servicer, as evidenced by historical portfolio delinquency and loss experience and securitization performance. Fitch deems AHFC capable to adequately service the 2013-2 transaction.
Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of AHFC would not impair the timeliness of payments on the securities.
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