Fitch Expects to Rate Ford Credit Auto Owner Trust 2012-D; Presale Issued
NEW YORK -- November 13, 2012
Fitch Ratings expects to assign the following ratings to the Ford Credit Auto
Owner Trust 2012-D notes:
--$234,900,000 class A-1 'F1+sf';
--$342,700,000 class A-2 'AAAsf'; Outlook Stable;
--$326,200,000 class A-3 'AAAsf'; Outlook Stable;
--$95,610,000 class A-4 'AAAsf'; Outlook Stable;
--$31,560,000 class B 'AAsf'; Outlook Stable;
--$21,040,000 class C 'Asf'; Outlook Stable;
--$21,040,000 class D 'BBBsf'; Outlook Stable.
KEY RATING DRIVERS
Stable Credit Quality: 2012-D pool is relatively consistent with prior deals.
The WA FICO score is 723. Despite this, there is a marginal shift down in the
credit/FICO tiers versus recent deals. The pool comprises 87.31% new vehicles,
has more 60 months or greater term retail contracts, and is geographically
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% non-declining reserve offset by
undercollateralization of 2.00% as an adjusted pool basis.
Improved Portfolio/Securitization Performance: Losses on Ford Credit's
portfolio and 2009 - 2012 FCAOT securitizations have 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 (IDR) of Ford, the parent of Ford Credit, and Ford Credit
'BBB-' with a Stable Rating Outlook.
Strong Wholesale Vehicle Market (WVM): The U.S. wholesale vehicle market
rebounded considerably during late 2009 - 2010 and remains strong in late
2012. However, Fitch remains cautious of the potential impact of general
economic weakness and rising fuel prices on demand for and values of used
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 2012-D.
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.
The presale report is available to all investors on Fitch's website at
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surveillance, and credit reports on more than 20 asset classes, contact
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Additional information is available at www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'U.S. Auto Loan ABS Rating Criteria' (April 16, 2012);
--'Structured Finance Tranche Thickness Metrics' (July 29, 2011);
--'Global Economic Outlook - Weaker Outlook Despite Monetary Policy Stimulus'
(Sept. 27, 2012);
--'United States of America' (Aug. 19, 2011).
Applicable Criteria and Related Research: Ford Credit Auto Owner Trust 2012-D
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Auto Loan ABS
Structured Finance Tranche Thickness Metrics
United States of America
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Peter Chung, Director
One State Street Plaza
New York, NY 10004
Du Trieu, Senior Director
Bradley Sohl, Senior Director
Sandro Scenga, New York
Tel: +1 212-908-0278
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