Fitch Rates CarMax Auto Owner Trust 2014-1

NEW YORK--()--Link to Fitch Ratings' Report: CarMax Auto Owner Trust 2014-1 (US ABS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=733685

Fitch Ratings assigns ratings and Rating Outlooks to the notes issued by CarMax Auto Owner Trust 2014-1 (CAOT 2014-1) as follows:

--$164,000,000 class A-1 'F1+sf';
--$306,000,000 class A-2 'AAAsf'; Outlook Stable;
--$288,000,000 class A-3 'AAAsf'; Outlook Stable;
--$119,030,000 class A-4 'AAAsf'; Outlook Stable;
--$14,960,000 class B 'AAsf'; Outlook Stable;
--$22,440,000 class C 'Asf'; Outlook Stable;
--$20,570,000 class D 'BBBsf'; Outlook Stable.

KEY RATING DRIVERS

Consistent Credit Quality: CAOT 2014-1 has consistent credit quality compared to pools securitized since 2011 exhibiting similar weighted average (WA) FICO score, credit tier mix, and percentage of used vehicles and original terms, although 2012-2013 pools have shown an increasing concentration of older model year vehicles.

Increased Credit Enhancement: While initial hard credit enhancement in CAOT 2014-1 is similar to recent transactions; the class B and C notes show an increase and the target enhancement has increased for all classes. Initial credit enhancement is sufficient to withstand Fitch's base case cumulative net loss proxy of 2.40% for all classes of notes at each classes' respective loss coverage multiple.

Stable Portfolio/Securitization Performance: Losses on CAF's portfolio and 2010-2013 securitizations have remained below peak levels seen in 2008 due to stronger quality originations and elevated used vehicle values, which have supported higher recovery rates.

Uncertain Macroeconomic Conditions: A slower recovery and potential for volatility could affect delinquencies and losses. Fitch's analysis accounts for this risk by including poorer performing vintages from the recent recession in the base case loss analysis.

Stable Origination, Underwriting, and Servicing: Fitch believes CAF demonstrates adequate abilities as originator, underwriter, and servicer to service CAOT 2014-1.

Integrity of the Legal Structure: The legal structure of the transaction should provide that a bankruptcy of CAF would not impair the timeliness of the payments on the securities.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. In turn, it could result in potentially adverse rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to all classes of CarMax Auto Owner Trust 2014-1 to increased losses over the life of the transaction. Fitch's analysis found that the notes display some sensitivity to increased defaults and losses. In fact, they could lead to potential downgrades of up to one category under Fitch's moderate (1.5x base case loss) scenario. The notes could experience downgrades of up to three rating categories under Fitch's severe (2.5x base case loss) scenario.

Key Rating Drivers and Rating Sensitivities are further described in Fitch's presale report, available at www.fitchratings.com or by clicking on the above link.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'Rating Criteria for U.S. Auto Loan ABS' (April 10 2013);
--'Structured Finance Tranche Thickness Metrics' (July 29, 2011);
--'CarMax Auto Owner Trust 2014-1 Appendix (Feb. 3, 2014).

Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Rating Criteria for U.S. Auto Loan ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704137
Structured Finance Tranche Thickness Metrics
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646951
CarMax Auto Owner Trust 2014-1 -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=734158

Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=820403
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Contacts

Fitch Ratings
Primary Analyst:
Autumn Mascio, +1-212-908-0896
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Joyce Fargas, +1-212-908-0824
Director
or
Committee Chairperson:
Du Trieu, +1-312-368-2091
Senior Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst:
Autumn Mascio, +1-212-908-0896
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Joyce Fargas, +1-212-908-0824
Director
or
Committee Chairperson:
Du Trieu, +1-312-368-2091
Senior Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com