Fitch Rates Mercedes-Benz Auto Lease Trust 2013-A
NEW YORK -- April 24, 2013
Fitch Ratings has assigned the following ratings and Rating Outlooks to the
notes issued by Mercedes-Benz Auto Lease Trust (MBALT) 2013-A:
--$478,850,000 class A-1 asset-backed notes 'F1+sf';
--$796,000,000 class A-2 asset-backed notes 'AAAsf'; Outlook Stable;
--$590,000,000 class A-3 asset-backed notes 'AAAsf'; Outlook Stable;
--$ 154,350,000 class A-4 asset-backed notes 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
Strong Collateral Quality: The 2013-A pool is consistent with that of 2012-A,
with a stronger WA FICO score of 780, nine months seasoning, a
well-diversified residual value (RV) maturity schedule and lower concentration
in longer term leases.
Adequate Credit Enhancement (CE) Structure: Initial CE totals 16.35%, an
increase of 10 bps from 2012-A, growing to 19.25% (75 bps higher than in
2012-A) of the initial securitization value. Initial excess spread is expected
to be 4.71%, in line with 2012-A (4.61%). Loss coverage remains adequate to
support Fitch's 'AAAsf' stressed assumptions.
Improved Loss Performance: Credit and residual losses on the Mercedes-Benz
Financial Services USA LLC (MBFS) portfolio declined significantly through
2012 from the elevated levels of 2008 and 2009. This is a result of strong
obligor credit quality and solid used vehicle values, leading to higher
recovery rates and residual realization.
Stable Corporate Health: Fitch rates Daimler AG, the parent of MBFS, 'A-/F2'
with a Stable Outlook. MBFS has good capabilities as an originator,
underwriter and servicer, as evidenced by historical performance of its
managed portfolio and prior securitizations.
Unstable Macroeconomic Conditions: While the wholesale vehicle market in the
U.S. is currently strong, Fitch remains concerned regarding potential
macroeconomic deterioration, which could lead to increased credit and residual
loss levels. Potential increases in gas prices in the near term may harm the
residual values of certain vehicles such as less fuel efficient models, namely
Legal Structure Integrity: The legal structure of the transaction should
provide that a bankruptcy of MBFS 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 MBALT 2013-A to increased credit and residual losses over the life
of the transaction. Fitch's analysis found that the transaction displays
relatively little sensitivity to increased defaults and credit losses, showing
downgrades of only one rating category even under Fitch's severe (2.5 times
base case loss) scenario. The transaction shows significantly more sensitivity
to residual loss volatility, though even under Fitch's severe scenario, the
class A notes would be expected to retain an investment grade rating.
Key Rating Drivers and Rating Sensitivities are further described in the
accompanying presale report.
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'.
Applicable Criteria and Related Research:
--'Criteria for Rating U.S. Auto Lease ABS' (May 14, 2012);
--'Global Structured Finance Rating Criteria' (June 6, 2012).
Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Criteria for Rating U.S. Auto Lease ABS
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Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Sean Egeran, CFA
Sandro Scenga, New York, +1 212-908-0278
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