Fitch Affirms BMW Floorplan Master Owner Trust, Series 2012-1 and 2015-1; Outlook Stable

CHICAGO--()--Fitch Ratings has affirmed the following outstanding notes issued by the BMW Floorplan Master Owner Trust (BMW FMOT) as a result of its annual review of the trust:

--2012-1 class A at 'AAAsf'; Outlook Stable;

--2015-1 class A at 'AAAsf'; Outlook Stable.

The class B notes in both series are not rated by Fitch.

KEY RATING DRIVERS

Good Quality of Receivables: The trust receivables are largely backed by new vehicles from dealers with strong internal dealer ratings and health.

Asset Concentrations: Dealers and manufacturers are subject to concentration limits, mitigating the risk of individual dealer defaults and losses. Further, the exposure to individual vehicle type, model or segment is mitigated with concentration limits in place.

Strong Dealer Network: Based on a review of dealer financial metrics and BMW FS' internal dealer risk ratings, which are categorized into eight distinct groups, the financial health of the participating dealer network in viewed as currently strong with the majority of dealers being profitable in 2015.

Strong Trust Performance: BMW FMOT has continued to experience positive trends in overall performance, including strong monthly payment rates (MPR), consistent asset yields, low agings/delinquencies and minimal dealer defaults and trust losses.

Adequate Credit Enhancement: Class A CE for 2012-1 and 2015-1 is currently 23.4% and 18.8% (of the series adjusted invested amount), respectively, comprised of an available subordination amount, subordination of the class B notes and a non-declining cash reserve fund. Structural features like early amortization triggers mitigate events of dealer/manufacturer defaults/bankruptcies.

Consistent Origination and Servicing: BMW FS has demonstrated adequate abilities as an originator, underwriter, and servicer, as evidenced by the historical delinquency and loss performance of BMW FMOT.

RATING SENSITIVITIES

To conduct a rating sensitivity for the outstanding notes, under a category B DFP platform, Fitch assumes portfolio default levels at 5%, 10%, and 15% and under two recovery-level scenarios of 50% and 30%. Fitch modeled each series with the assumption that the above defaults have occurred, reflecting asset performance in a stressed environment.

However, to date, performance for the trust has remained strong. A material deterioration would have to occur in performance to have potential negative impact on the ratings for each series.

DUE DILIGENCE USAGE

{No third-party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

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

Global Rating Criteria for Dealer Floorplan ABS (pub. 06 Jan 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=833468

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

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

Related Research

BMW Floorplan Master Owner Trust 2012 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=688583

BMW Floorplan Master Owner Trust, Series 2015-1 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868450

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989840

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989840

Endorsement Policy

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

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Contacts

Fitch Ratings
Primary Analyst
Timothy McNally
Associate Director
+1-212-908-0870
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
John Bella Jr.
Managing Director
+1-212-908-0243
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Timothy McNally
Associate Director
+1-212-908-0870
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
John Bella Jr.
Managing Director
+1-212-908-0243
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com