NEW YORK--(BUSINESS WIRE)--As part of its ongoing surveillance, Fitch Ratings has affirmed the ratings on the following Honda Auto Receivables Owner Trusts:
2013-1
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable.
2013-4
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable.
2014-4
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
The rating affirmations are based on available credit enhancement (CE) and loss performance. The collateral pool continues to perform within Fitch's expectations. Based on the current structure and CE, 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 ratings reflect the quality of American Honda Finance Corp.'s retail auto loan originations, the strength of its servicing capabilities, and the sound financial and legal structure of the transactions.
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 multiples levels for the transaction. 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 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 expectations with rising loss coverage and multiple levels. Therefore, a material deterioration in performance would have to occur within the asset pool to have potential negative impact on the outstanding ratings.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch's analysis of the Representation and Warranties (R&W) of these transactions can be found in 'Honda Auto Receivables 2013-4 Owner Trust - Appendix', 'Honda Auto Receivables 2013-1 Owner Trust - Appendix' and 'Honda Auto Receivables 2014-4 Owner Trust - 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 April 17, 2015.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
Rating Criteria for U.S. Auto Loan ABS (pub. 10 Apr 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863979
Related Research
Honda Auto Receivables 2013-1 Owner Trust -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708549
Honda Auto Receivables 2013-4 Owner Trust -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=721377
Honda Auto Receivables 2014-4 Owner Trust -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=813248
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990304
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990304
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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