March 17 (The following statement was released by the rating agency)
Fitch Ratings expects to assign the following ratings
and Rating Outlooks to the Ford Credit Auto Lease Trust 2014-A notes:
--$230,000,000 class A-1 'F1+sf';
--$132,000,000 class A-2A 'AAAsf'; Outlook Stable;
--$393,000,000 class A-2B 'AAAsf'; Outlook Stable;
--$375,000,000 class A-3 'AAAsf'; Outlook Stable;
--$120,000,000 class A-4 'AAAsf'; Outlook Stable;
--$70,290,000 class B 'AAsf'; Outlook Stable;
--$65,550,000 class C 'Asf'; Outlook Stable.
KEY RATING DRIVERS
Strong Credit Quality: Credit quality for the pool is consistent with that of
recent pools. The weighted average (WA) Fair Isaac Corp. (FICO) score is 745 and
WA original term is 33.2 months; 81.44% of the pool consists of leases with
terms of 36 months or less. The pool is geographically diverse with
approximately nine months seasoning, and comprises 100% new vehicles.
Adequate Credit Enhancement Structure: 2014-A is a sequential-pay structure.
Initial hard credit enhancement for the class A, B, and C notes totals 20.40%,
15.90%, and 11.70%, respectively, consistent with 2013-B.
Consistent Lease Maturities: 2014-A consists of 73.45% undiscounted base
residual value (RV), in line with prior pools. The residual lease maturities are
well distributed, with a highest single-month period in December 2015 accounting
for 6.28% and 54.01% of the pool maturing within two years from the
Evolving Wholesale Market: The U.S. wholesale vehicle market has remained strong
in recent years. However, increasing off-lease vehicle supply and pressure from
increased production levels could lead to decreased residual realizations during
the life of the transaction.
Stable Corporate Health: Fitch currently rates Ford's (the parent of Ford
Credit) and Ford Credit's long-term IDR 'BBB-' with a Stable Outlook.
Consistent Origination/Underwriting/Servicing: Ford Credit demonstrates good
capabilities as originator, underwriter, and servicer. This is evidenced by
historical delinquency, credit, and residual value loss performance of its
managed portfolio and securitizations. Fitch deems Ford Credit capable of
adequately servicing 2014-A.
Unanticipated decreases in the value of returned vehicles and/or increases in
the frequency of defaults and loss severity on defaulted receivables could
produce loss levels higher than the base case. This in turn could result in
negative rating actions on the notes. Fitch evaluated the sensitivity of the
ratings assigned to Ford Credit Auto Lease Trust 2014-A to increased credit and
residual losses over the life of the transaction.
Fitch's analysis found that the transaction displays some sensitivity to
increased defaults and credit losses, showing downgrades of one rating category
under Fitch's 1.5x base case loss scenario. Additionally, downgrades of one or
two rating categories were seen under Fitch's severe (2.5x base case loss)
scenario. The transaction shows significantly more sensitivity to residual loss
volatility. As such, under its severe residual loss scenario, Fitch would expect
to downgrade the class of notes by two or more rating categories.
The presale report is available at 'www.fitchratings.com' or by clicking on the
Link to Fitch Ratings' Report: Ford Credit Auto Lease Trust 2014-A (US ABS)