Feb 19 - Fitch Ratings expects to assign the following ratings to the Ford Credit Auto Owner Trust 2013-A notes:
—$307,100,000 class A-1 ‘F1+sf’;
—$415,300,000 class A-2 ‘AAAsf’; Outlook Stable;
—$420,700,000 class A-3 ‘AAAsf’; Outlook Stable;
—$106,850,000 class A-4 ‘AAAsf’; Outlook Stable;
—$39,470,000 class B ‘AAsf’; Outlook Stable;
—$26,310,000 class C ‘Asf’; Outlook Stable;
—$26,310,000 class D ‘BBBsf’; Outlook Stable.
Key Rating Drivers
Stable Credit Quality: 2013-A pool is relatively consistent with prior deals. The WA FICO score is 726 with 87.45% of new vehicles. The pool is geographically diverse with approximately seven months of seasoning, and consists of 40.86% of the retail contracts with terms more than 60 months.
Adequate Credit Enhancement Structure: The cash flow distribution is a sequential-pay structure, consistent with prior transactions. Initial hard credit enhancement (CE) for the class A notes totals 5.50%, consisting of 7.00% subordination and a 0.50% nondeclining reserve offset by undercollateralization of 2.00% on an adjusted pool basis.
Improved Portfolio/Securitization Performance: Losses on Ford Credit’s portfolio and 2009-2012 FCAOT securitizations declined, supported by the improving, albeit volatile, U.S. economy and strong used vehicle values resulting in higher recovery rates.
Positive Corporate Performance: Fitch currently rates the long-term Issuer Default Rating of Ford Motor Co., the parent of Ford Credit and Ford Credit, ‘BBB-‘ with a Stable Rating Outlook.
Strong Wholesale Vehicle Market (WVM): The U.S. WVM is healthy in early 2013. However, Fitch remains cautious of the potential impact of general economic weakness and rising fuel prices on demand for and values of used vehicles.
Consistent Origination/Underwriting/Servicing: Ford Credit demonstrates good capabilities as originator, underwriter, and servicer, evidenced by historical delinquency and loss performance of its managed portfolio and securitizations. Fitch deems Ford Credit capable to adequately service 2013-A.
Integrity of Legal Structure: The legal structure of the transaction should provide that a bankruptcy of Ford Credit would not impair the timeliness of payments on the securities.