NEW YORK--(BUSINESS WIRE)--Fitch Ratings has assigned an 'AAAsf' rating to the class A notes of Ford Credit Floorplan Master Owner Trust A (FCFMOT) series 2015-3. The Rating Outlook is Stable.
KEY RATING DRIVERS
Consistent Quality of Receivables: The trust receivables in this series have a high percentage of loans backing new vehicles at over 92.6%, are geographically diverse and have strong collateral aging with only 5.3% of the trust inventory aged past 270 days (as of March 31, 2015).
Limited Asset Concentrations: Dealers are subject to concentration limits, mitigating the risk of individual dealer defaults and losses. Furthermore, the exposure to individual vehicle type, manufacturer or segment is mitigated with concentration limits in place.
Strong Dealer Network: Based on dealer financial metrics and Ford Credit's internal dealer risk ratings (categorized into four distinct groups), the financial health of Ford Motor Credit Company's (FMCC) dealer network is currently strong, with the majority of dealers profitable in early 2015.
Strong Trust Performance: FCFMOT continues to experience positive trends in overall performance, including elevated monthly payment rates (MPRs), adequate asset yields, low agings and delinquencies, minimal dealer defaults and no trust losses.
Sufficient Credit Enhancement: Initial credit enhancement (CE) for the class A notes is 24.27% (of the pool), consisting of 23.50% available subordinate amount and a 0.77% reserve. Structural features, including early amortization triggers, mitigate risks stemming from dealer/manufacturer defaults/bankruptcies.
Consistent Origination and Servicing: FMCC demonstrates adequate abilities as an originator, underwriter and servicer, as evidenced by the historical delinquency and loss performance of FCFMOT. Wells Fargo Bank, N.A. (Wells Fargo) is the backup servicer for this series.
Legal Analysis: The legal structure of the transaction provides that a bankruptcy of FMCC would not impair the timeliness of payments on the securities.
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 modelled this series with the assumption that the above defaults have occurred and recoveries were 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 in relation to this rating action.
Fitch has assigned the following ratings:
--$300,000,000 class A notes at 'AAAsf'; Outlook Stable.
Additional information is available at www.fitchratings.com.
Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014)
Global Rating Criteria for Dealer Floorplan ABS (pub. 06 Jan 2015)
Global Structured Finance Rating Criteria (pub. 31 Mar 2015)
Dodd-Frank Rating Information Disclosure Form