NEW YORK--(BUSINESS WIRE)--As part of its ongoing surveillance, Fitch Ratings upgrades three and affirms seven classes of CarMax Auto Owner Trust as follows:
CarMax Auto Owner Trust 2012-2:
--Class A-3 affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 affirmed at 'AAAsf'; Outlook Stable;
--Class B affirmed at 'AAAsf'; Outlook Stable;
--Class C upgraded to 'AAAsf' from 'AAsf'; Outlook to Stable from Positive;
--Class D upgraded to 'Asf' from 'BBBsf'; Outlook to Stable from Positive.
CarMax Auto Owner Trust 2013-2:
--Class A-3 affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 affirmed at 'AAAsf'; Outlook Stable;
--Class B upgraded to 'AAAsf' from 'AAsf'; Outlook to Stable from Positive;
--Class C affirmed at 'Asf'; Outlook Positive;
--Class D affirmed at 'BBBsf'; Outlook to Positive from Stable.
KEY RATING DRIVERS
The rating actions are based on available credit enhancement and loss performance. Each collateral pool continues to perform within Fitch's expectations. Under the current structures and credit enhancement levels, the securities are able to withstand stress scenarios consistent with the assigned ratings and make full payments to investors in accordance with the terms of the documents. The Positive Outlooks reflect Fitch's expectations that as loss protection continues to increase, further upgrades are likely in the next 12 months.
The ratings reflect the quality of CarMax Business Services, LLC's retail auto loan originations, the strength of its servicing capabilities, and the sound financial and legal structure of the transactions.
RATING SENSITIVITY
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxies and impact available loss coverage and multiples levels for the transactions. Lower loss coverage could impact ratings and Rating Outlooks, depending on the extent of the decline in coverage.
In Fitch's initial review of the transactions, the notes were found to have limited sensitivity to a 1.5x and 2.5x increase of Fitch's base case loss expectation. To date, each transaction has exhibited stable performance with losses within Fitch's initial expectations leading to rising loss coverage and multiple levels. A material deterioration in performance would have to occur within the asset pools to have potential negative impact on the outstanding ratings.
Fitch's analysis of the Representation and Warranties (R&W) of these transactions can be found in 'CarMax Auto Owner Trust 2012-2 - Appendix' and 'CarMax Auto Owner Trust 2013-2 - Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in the Global Structured Finance Transactions' dated March 26, 2015.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Rating Criteria for U.S. Auto Loan ABS' (April 10, 2015);
--'Global Structured Finance Rating Criteria' (March 31, 2015);
--'Representations, Warranties, and Enforcement Mechanisms in the Global Structured Finance Transactions' (March 26, 2015);
--'CarMax Auto Owner Trust 2012-2 - Appendix (Jan. 17, 2014);
--'CarMax Auto Owner Trust 2013-2 - Appendix (May 6, 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268
Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863817
CarMax Auto Owner Trust 2012-2 -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730418
CarMax Auto Owner Trust 2013-2 -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708324
Rating Criteria for US Auto Loan ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863979
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=983159
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