Fitch Expects to Rate Ford Credit Auto Lease Trust 2013-A; Presale Issued
NEW YORK -- March 11, 2013
Fitch Ratings expects to assign the following ratings to the Ford Credit Auto
Lease Trust 2013-A notes:
--$154,000,000 class A-1 'F1+sf';
--$344,000,000 class A-2 'AAAsf'; Outlook Stable;
--$344,000,000 class A-3 'AAAsf'; Outlook Stable;
--$69,470,000 class A-4 'AAAsf'; Outlook Stable;
--$44,680,000 class B 'AAsf'; Outlook Stable;
--$44,680,000 class C 'Asf'; Outlook Stable;
--$31,276,000 class D 'BBBsf'; Outlook Stable.
Key Rating Drivers
Strong Credit Quality: Credit quality for the pool is consistent with that of
recent pools. The weighted average (WA) Fair Isaac Corp. (FICO) score is 748,
and the original term is 34.8 months, with 26.61% of the leases with original
terms of more than 36 months. The pool is geographically diverse with
approximately 10 months of seasoning, consisting of 100% new vehicles.
Adequate Structural Protection: 2013-A is a sequential-pay structure. Initial
hard credit enhancement (CE) for class A notes totals 18.90% (10.80%
subordinated class B, C, and D notes, 7.60% initial overcollateralization
[OC], and a 0.50% reserve).
Consistent Lease Maturities: 2013-A consists of 72.10% undiscounted base
residual value (RV), in line with prior pools. Lease maturities are well
distributed, with 55.18% of the pool maturing after two or more years
following close. However, five months represent more than 5.00% of the total
base RV, and a single-month period in November 2015 accounts for 8.38%.
State of the Wholesale Vehicle Market: The U.S. wholesale vehicle market (WVM)
has been healthy thus far in 2013. However, Fitch Ratings remains cautious on
the potential impact of general economic weakness and rising fuel prices on
demand for and values of used vehicles.
Stable Corporate Health: Fitch currently rates the long-term issuer default
rating (IDR) of Ford (the parent of Ford Credit) and Ford Credit
Consistent Origination/Underwriting/Servicing: Ford Credit demonstrates good
capabilities as originator, underwriter, and servicer, as evidenced by the
historical delinquency/loss performance of its managed portfolio and
securitizations. Fitch deems Ford Credit capable of adequately servicing
Legal Structure Integrity: The legal structure of the transaction should
provide that a bankruptcy of Ford Credit would not impair the timeliness of
payments on the securities.
Unanticipated decreases in the value of returned vehicles and/or increases in
the frequency of defaults and loss severity on defaulted receivables could
produce loss levels higher than the base case and could result in potential
rating actions on the notes. Fitch evaluated the sensitivity of the ratings
assigned to FCALT 2013-A to increased credit and residual losses over the life
of the transaction.
Fitch's analysis found that the transaction displays some sensitivity to
increased defaults and credit losses, showing downgrades of one rating
category under Fitch's 1.5x base case loss scenario, while experiencing
downgrades of one or two rating categories under Fitch's severe (2.5x base
case loss) scenario. The transaction shows significantly more sensitivity to
residual loss volatility, under Fitch's severe residual loss scenario, all
class of notes would be expected to be downgraded by two or more rating
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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 2012;
--'Criteria for Rating U.S. Auto Lease ABS', May 2012;
--'Counterparty Criteria for Structured Finance Transactions', May 2012;
--'Criteria for Servicing Continuity Risk in Structured Finance', August 2012;
--'Structured Finance Tranche Thickness Metrics', July 2011.
Applicable Criteria and Related Research Ford Credit Auto Lease Trust 2013-A
Global Structured Finance Rating Criteria
Criteria for Rating U.S. Auto Lease ABS
Counterparty Criteria for Structured Finance Transactions
Criteria for Servicing Continuity Risk in Structured Finance
Structured Finance Tranche Thickness Metrics
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Peter Chung, +1-212-908-0724
One State Street Plaza
New York, NY 10004
Smitha Dawson, +1-212-908-1298
John H. Bella, +1-212-908-1243
Sandro Scenga, New York, +1 212-908-0278
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