Fitch Expects to Rate BMW Vehicle Lease Trust 2013-1; Presale Issued
CHICAGO -- January 14, 2013
Fitch Ratings expects to assign the following ratings and Rating Outlooks to
the notes issued by BMW Vehicle Lease Trust (BMWLT) 2013-1:
--Class A-1 asset-backed notes 'F1+sf';
--Class A-2 asset-backed notes 'AAAsf'; Outlook Stable;
--Class A-3 asset-backed notes 'AAAsf'; Outlook Stable;
--Class A-4 asset-backed notes 'AAAsf'; Outlook Stable.
Key Rating Drivers
Stable Collateral Quality: The pool is consistent with that of 2012-1, with a
strong WA FICO score of 764, seasoning of 9 months, a well-diversified
residual value (RV) maturity schedule, a similar RV concentration (70.5%), and
a consistent mix of original lease terms.
Adequate CE Structure: Initial credit enhancement (CE) has decreased by 0.50%
from 2012-1, and will be 17.25% growing to 19.50% of the initial
securitization value. Initial excess spread is expected to be 4.80%,
consistent with 4.79% in 2012-1. Loss coverage is adequate to support Fitch's
'AAAsf' stressed assumptions.
Strong Loss Performance: Credit and residual loss performance on BMW FS's
portfolio has improved dramatically from the elevated levels seen in 2008 and
2009. This is a result of strong obligor credit quality and a solid wholesale
used vehicle market, leading to higher recovery rates and residual
Used Vehicle Market Uncertainty: While the wholesale vehicle market in the
U.S. is currently strong, factors such as increased new vehicle sales and
lease volumes could impact the health of the wholesale vehicle market in the
future. Approximately 50.6% of base residuals mature in 2015, and the
wholesale market may not be as strong at that time.
Legal Structure Integrity: The legal structure of the transaction should
provide that a bankruptcy of BMW FS would not impair the timeliness of
payments on the securities.
Stable Origination/Underwriting/Servicing: Fitch believes BMW FS to be a
capable originator, underwriter, and servicer. These capabilities are further
evidenced by historical portfolio delinquency and loss experience and
The presale report is available to all investors on Fitch's website at
'www.fitchratings.com'. For more information about Fitch's comprehensive
subscription service FitchResearch, which includes all presale reports,
surveillance, and credit reports on more than 20 asset classes, contact
product sales at +1-212-908-0800 or at 'email@example.com'.
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);
--'Criteria for Rating US Auto Lease ABS' (May 14, 2012);
--'Criteria for Interest Rate Stresses in Structured Finance Transactions'
(March 20, 2012).
Applicable Criteria and Related Research: BMW Vehicle Lease Trust 2013-1 (US
Global Structured Finance Rating Criteria
Criteria for Rating U.S. Auto Lease ABS
Criteria for Interest Rate Stresses in Structured Finance Transactions
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