Sept 9 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings expects to assign ratings and Outlooks to Ford Credit Floorplan Master Owner Trust A (FCFMOT), series 2013-5 as follows:
--$1,000,000,000 class A-1/A-2 ‘AAAsf’; Outlook Stable;
--$45,752,000 class B ‘AAsf’; Outlook Stable;
--$65,359,000 class C ‘Asf’; Outlook Stable;
--$39,216,000 class D ‘BBBsf’; Outlook Stable.
Consistent Quality of Receivables: The trust receivables in this series have a high percentage of loans backing new vehicles at over 92%, are geographically diverse, and have strong collateral aging with only 4.1% of the trust inventory aged past 270 days (as of June 30, 2013).
Limited Asset Concentrations: Dealers are subject to concentration limits, mitigating the risk of individual dealer defaults and losses. Furthermore, the exposure to individual vehicle type, manufacturer or segment is mitigated with concentration limits in place.
Strong Dealer Network: Based on dealer financial metrics and Ford Credit’s internal dealer risk ratings (categorized into four distinct groups), the financial health of Ford’s dealer network is currently strong, with the majority of dealers profitable in 2013.
Strong Trust Performance: FCFMOT continues to experience positive trends in overall performance, including elevated monthly payment rates (MPRs), adequate asset yields, low agings and delinquencies, minimal dealer defaults and no trust losses.
Sufficient Credit Enhancement: Initial credit enhancement (CE) for the class A notes is 24.38% (of the pool or 24.50% of the notes), consisting of 11.50% subordination, 12.00% available subordinate amount, and a 0.88% reserve. Structural features, including early amortization triggers, mitigate risks stemming from dealer/manufacturer defaults/bankruptcies.
Consistent Origination and Servicing: Ford Credit demonstrates adequate abilities as an originator, underwriter, and servicer, as evidenced by the historical delinquency and loss performance of FCFMOT. Wells Fargo Bank N.A. (Wells Fargo) is the backup servicer for this series.
Legal Structure Integrity: The legal structure of the transaction provides that a bankruptcy of Ford Credit would not impair the timeliness of payments on the securities.
To conduct rating sensitivity for the issued notes, under a category B Dealer Floorplan platform, Fitch assumes portfolio default levels at 10%, 25%, and 40%, and under two recovery level scenarios of 50% and 30%. Fitch modeled series 2013-5 with the assumption that the above defaults have occurred and recoveries stressed accordingly, reflecting asset performance in a stressed environment. Remaining expected loss levels were compared with the stressed loss assumption grid commensurate with various rating levels.
The presale report is available to all investors website at ‘www.fitchratings.com’ or by clicking on the below link.
Link to Fitch Ratings’ Report: Ford Credit Floorplan Master Owner Trust A, Series 2013-5 (US ABS)