Fitch to Rate GMF Floorplan Owner Revolving Trust, Series 2016-1; Issues Presale

NEW YORK--()--Fitch Ratings expects to assign the following ratings and outlooks to the GMF Floorplan Owner Revolving Trust, series 2016-1 as follows:

--$500,000,000 classes A-1/A-2 asset-backed notes 'AAAsf'; Outlook Stable;

--$34,246,000 class B asset-backed notes 'AAsf'; Outlook Stable;

--$30,822,000 class C asset-backed notes 'Asf'; Outlook Stable;

--$27,397,000 class D asset-backed notes 'BBBsf'; Outlook Stable.

KEY RATING DRIVERS

Quality of Wholesale Receivables: The receivables are primarily new vehicles (85% as of March 31, 2016, the trust's statistical date [SD]) with strong aging distribution.

Adequate Dealer Diversification: The trust is comprised of 591 dealer accounts, with the top 25 dealers in the trust totalling significantly less than 50% of the trust balance as of the SD. Dealer concentration limits are in place, mitigating risks of individual dealer defaults and losses. Concentration limits are also in place to limit exposure to specific vehicle types and segments.

Strength of Dealer Network: The financial health of GMF's dealer network is evidenced by the current stable dealer financial metrics, including healthy dealer revenues, with the majority of dealers recording solid profits since inception.

Stable Trust Performance: Since inception in February 2013, GMF's trust portfolio has experienced consistent performance trends, including stable MPRs, low agings, stable yields, and zero dealer defaults or losses.

Sufficient Credit Enhancement: Initial credit enhancement (CE) for the class A notes is 27.86% (of the initial collateral balance), down from 29.36% in 2015-1; all note CE is lower in 2016-1 versus 2015-1. Structural features such as early amortization triggers mitigate risks of manufacturer and dealer defaults and/or bankruptcies.

Consistent Origination and Servicing: GMF demonstrates adequate abilities as originator, underwriter and servicer, as evidenced by their total portfolio and GFORT performance metrics.

Legal Analysis: The legal structure of the transaction provides that a bankruptcy of GMF would not impair the timeliness of payments on the securities.

RATING SENSITIVITIES

To conduct rating sensitivity for the issued notes, under a category B Dealer Floorplan platform, Fitch assumes portfolio default levels at 10%, 25%, and 40%, and under two recovery-level scenarios of 50% and 30%. Fitch modeled these series with the assumption that the above defaults have occurred and recoveries stressed accordingly, reflecting asset performance in a stressed environment. Remaining expected loss levels were compared with the stressed loss assumption grid commensurate with various rating levels.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed as 2016-1 is a private 144A offering.

Fitch's analysis of the Representation and Warranties (R&W) of these transactions can be found in 'GM Financial Floorplan Owner Revolving Trust, Series 2016-1 -- Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in Fitch's March 2016 special report, 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions'.

Additional information is available at www.fitchratings.com.

GMF Floorplan Owner Revolving Trust, Series 2016-1 (US ABS)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=881818

Applicable Criteria

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=838868

Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875586

Exposure Draft: Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 Apr 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=878412

Global Rating Criteria for Dealer Floorplan ABS (pub. 05 May 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=880077

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Related Research

GMF Floorplan Owner Revolving Trust, Series 2016-1 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=881851

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1004676

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1004676

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Hylton Heard
Senior Director
+1-212-908-0214
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Cole MacKenzie
Analyst
+1-212-908-0830
or
Committee Chairperson
Kevin Corrigan
Senior Director
+1-212-908-9156
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Hylton Heard
Senior Director
+1-212-908-0214
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Cole MacKenzie
Analyst
+1-212-908-0830
or
Committee Chairperson
Kevin Corrigan
Senior Director
+1-212-908-9156
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com