(Repeat for additional subscribers)
July 22 (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-B notes:
--$280,000,000 class A-1 'F1+sf';
--$142,000,000 class A-2A 'AAAsf'; Outlook Stable;
--$425,000,000 class A-2B 'AAAsf'; Outlook Stable;
--$376,000,000 class A-3 'AAAsf'; Outlook Stable;
--$130,000,000 class A-4 'AAAsf'; Outlook Stable;
--$76,050,000 class B 'AAsf'; Outlook Stable;
--$70,950,000 class C 'NRsf'.
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 746 and
WA original term is 34.1 months, with 79.14% of the leases with terms of 36
months or more. The pool is geographically diverse with approximately 10 months
of seasoning and comprises 100% new vehicles.
Adequate Credit Enhancement Structure: 2014-B is a sequential-pay structure.
Initial hard credit enhancement (CE) for the class A notes totals 20.40% (8.70%
subordinated class B and C notes, 11.20% initial overcollateralization, and
Consistent Lease Maturities: 2014-B consists of 71.73% undiscounted base
residual value (RV), which is in line with prior pools. The lease maturities are
well distributed. However, there are six months that represent more than 5% of
the total base RV with a highest single-month period in February 2017 accounting
for 7.41% and 56.63% of the pool maturing two years following close.
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 realization during
the life of the transaction.
Stable Corporate Health: Fitch currently rates the long-term IDR of Ford (the
parent of Ford Credit) and Ford Credit 'BBB-' with a Positive Rating 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-B.
Legal Structure Integrity: The legal structure of the transaction should provide
that a bankruptcy of Ford Credit would not impair the timeliness of payments on
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-B 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-B (US ABS)