Fitch Expects to Rate Ford Credit Auto Owner Trust 2013-A; Presale Issued
NEW YORK -- February 19, 2013
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.
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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;
--'Counterparty Criteria for Structured Finance Transactions, May 20, 2012;
--'Structured Finance Tranche Thickness Metrics', July 29, 2011.
Applicable Criteria and Related Research: Ford Credit Auto Owner Trust 2013-A
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Auto Loan ABS
Counterparty Criteria for Structured Finance Transactions
Structured Finance Tranche Thickness Metrics
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