Fitch to Rate Ford Credit Auto Lease Trust 2014-A; Issues Presale

NEW YORK--()--Link to Fitch Ratings' Report: Ford Credit Auto Lease Trust 2014-A (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=740847

Fitch Ratings expects to assign the following ratings and Rating Outlooks to the Ford Credit Auto Lease Trust 2014-A notes:

--$230,000,000 class A-1 'F1+sf';

--$132,000,000 class A-2A 'AAAsf'; Outlook Stable;

--$393,000,000 class A-2B 'AAAsf'; Outlook Stable;

--$375,000,000 class A-3 'AAAsf'; Outlook Stable;

--$120,000,000 class A-4 'AAAsf'; Outlook Stable;

--$70,290,000 class B 'AAsf'; Outlook Stable;

--$65,550,000 class C 'Asf'; 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 745 and WA original term is 33.2 months; 81.44% of the pool consists of leases with terms of 36 months or less. The pool is geographically diverse with approximately nine months seasoning, and comprises 100% new vehicles.

Adequate Credit Enhancement Structure: 2014-A is a sequential-pay structure. Initial hard credit enhancement for the class A, B, and C notes totals 20.40%, 15.90%, and 11.70%, respectively, consistent with 2013-B.

Consistent Lease Maturities: 2014-A consists of 73.45% undiscounted base residual value (RV), in line with prior pools. The residual lease maturities are well distributed, with a highest single-month period in December 2015 accounting for 6.28% and 54.01% of the pool maturing within two years from the transaction's close.

Evolving Wholesale Market: The U.S. wholesale vehicle market has remained strong in recent years. However, increasing off-lease vehicle supply and pressure from increased production levels could lead to decreased residual realizations during the life of the transaction.

Stable Corporate Health: Fitch currently rates Ford's (the parent of Ford Credit) and Ford Credit's long-term IDR 'BBB-' with a Stable Outlook.

Consistent Origination/Underwriting/Servicing: Ford Credit demonstrates good capabilities as originator, underwriter, and servicer. This is evidenced by historical delinquency, credit, and residual value loss performance of its managed portfolio and securitizations. Fitch deems Ford Credit capable of adequately servicing 2014-A.

RATING SENSITIVITIES

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. This in turn could result in negative rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to Ford Credit Auto Lease Trust 2014-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. Additionally, downgrades of one or two rating categories were seen under Fitch's severe (2.5x base case loss) scenario. The transaction shows significantly more sensitivity to residual loss volatility. As such, under its severe residual loss scenario, Fitch would expect to downgrade the class of notes by two or more rating categories.

The presale report is 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 2013);

--'Criteria for Rating U.S. Auto Lease ABS' (April 2013);

--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 2013);

--'Criteria for Servicing Continuity Risk in Structured Finance' (July 2013);

--'Structured Finance Tranche Thickness Metrics' (July 2011);

--'Criteria for Interest Rate Stresses in Structured Finance Transactions' (January 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Criteria for Rating U.S. Auto Lease ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=706699

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155

Criteria for Servicing Continuity Risk in Structured Finance

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=712935

Structured Finance Tranche Thickness Metrics

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646951

Criteria for Interest Rate Stresses in Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695535

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=824031

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Eugene Kushnir, +1 212-908-0830
Associate Director
Fitch Ratings, Inc., One State Street Plaza, New York, NY 10004
or
Secondary Analyst
Margaret Rowe, +1 312-368-3167
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

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Contacts

Fitch Ratings
Primary Analyst
Eugene Kushnir, +1 212-908-0830
Associate Director
Fitch Ratings, Inc., One State Street Plaza, New York, NY 10004
or
Secondary Analyst
Margaret Rowe, +1 312-368-3167
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