NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms two classes of Honda Auto Receivables 2012-3 Owner Trust as follows:
--Class A-3 asset-backed notes 'AAAsf'; Outlook Stable;
--Class A-4 asset-backed notes 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
The transaction has exceeded performance to date relative to Fitch's initial cumulative net loss expectation of 0.90% with a current CNL of 31 bps. The affirmations of the A-3 and A-4 notes reflect loss coverage levels consistent with current ratings. The stable outlooks on the notes reflect Fitch's view that the transaction will continue to perform well.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxy and impact available loss coverage and multiple levels. Lower loss coverage could impact ratings and outlooks, depending on the extent of the decline in coverage.
In Fitch's initial review of the transaction, 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, the transaction has exhibited strong performance with losses well within Fitch's initial expectation with rising loss coverage and multiple levels. As such, a material deterioration in performance would have to occur within the asset pool to have potential negative impact on the outstanding ratings.
Fitch's analysis of the Representation and Warranties (R&W) of 2012-3 can be found in Honda Auto Receivables 2012-3 Owner Trust Appendix'. The 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
Global Structured Finance Rating Criteria (pub. 31 Mar 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268
Rating Criteria for US Auto Loan ABS (pub. 10 Apr 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863979
Additional Disclosures
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985477
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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