Fitch Rates Ford Credit Auto Lease Trust 2015-B; Outlook Stable

CHICAGO--()--Fitch Ratings assigns the following ratings and Outlooks to the Ford Credit Auto Lease Trust 2015-B (FCALT 2015-B) notes;

--Class A-1 asset-backed notes 'F1+sf';

--Class A-2a asset-backed notes 'AAAsf'; Outlook Stable;

--Class A-2b asset-backed notes 'AAAsf'; Outlook Stable;

--Class A-3 asset-backed notes 'AAAsf'; Outlook Stable;

--Class A-4 asset-backed notes 'AAAsf'; Outlook Stable;

--Class B asset-backed notes 'AAsf'; Outlook Stable;

--Class C asset-backed notes 'NR'.

KEY RATING DRIVERS

Strong Credit Quality: Credit quality for the pool is consistent with that of recent pools. The weighted average (WA) Fair Isaac Corp. (FICO) score is 741 and WA original term is 34.5 months, with 84.1% of the leases with terms of 36 months or more. The pool is geographically diverse with approximately 10 months of seasoning and comprises 10% new vehicles.

Consistent Lease Maturities: 2015-B consists of 74.24% undiscounted base residual value (RV), in line with prior pools. The lease maturities are well distributed. There are six months that each represents more than 5% of the total base RV with a highest single-month period in July 2018 accounting for 6.4%. 51% of the pool matures by October 2017, within two years following close.

Adequate Credit Enhancement Structure: 2015-B is a sequential-pay structure. Initial hard credit enhancement (CE) for the class A notes totals 20.4% (8.7% subordinated class B and C notes, 11.2% initial overcollateralization [OC], and 0.5% reserve). Initial excess spread is expected to be 4.18%.

Evolving Wholesale Market: The U.S. wholesale vehicle market has been normalizing following strong performance in recent years. Fitch expects that increasing off-lease vehicle supply and pressure from increased production levels will lead to decreased residual realizations during the life of the transaction.

Consistent Origination/Underwriting/Servicing: Ford Credit demonstrates good capabilities as originator, underwriter and servicer, as evidenced by historical delinquency, credit, and residual value loss performance of its managed portfolio and securitizations.

Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of Ford Credit would not impair the timeliness of payments on the securities.

RATING SENSITIVITIES

Unanticipated decreases in the value of returned vehicles and/or increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case and would likely result in declines of CE and loss coverage levels available to the notes. Hence, Fitch conducts sensitivity analyses by increasing the transaction's initial base case RV and credit loss assumptions and examining the rating implications on all classes of issued notes. The increases to the base case losses are applied such that they represent moderate (1.5x) and severe (2.5x) stresses, and are intended to provide an indication of the rating sensitivity of notes to unexpected deterioration of a trust's performance.

DUE DILIGENCE USAGE

Fitch was provided with third-party due diligence information from PricewaterhouseCoopers LLP. The third-party due diligence information was provided on Form ABS Due Diligence-15E and focused on a comparison and re-computation of certain characteristics with respect to 125 sample leases. Fitch considered this information in its analysis and the findings did not have an impact on our analysis. A copy of the ABS Due Diligence Form-15E received by Fitch in connection with this transaction may be obtained through the link contained on the bottom of the related rating action commentary.

Key Rating Drivers and Rating Sensitivities are further described in the presale report dated Oct. 15, 2015. Fitch's analysis of the Representations and Warranties (R&W) of this transaction can be found in 'Ford Credit Auto Lease Trust 2015-B - Appendix'. These R&Ws are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated June 12, 2015.

Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report, available at 'www.fitchratings.com' or by clicking on the link.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Criteria for Rating U.S. Auto Lease ABS (pub. 19 Oct 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=872539

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

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

Related Research

Ford Credit Auto Lease Trust 2015-B -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=872434

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=992966

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=992966

Endorsement Policy

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

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Puloma Mukherjee, +1-212-908-9131
Associate Director
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Secondary Analyst
Margaret Rowe, +1-312-368-3167
Director
or
Committee Chairperson
Hylton Heard, +1-212-908-0214
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Puloma Mukherjee, +1-212-908-9131
Associate Director
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Secondary Analyst
Margaret Rowe, +1-312-368-3167
Director
or
Committee Chairperson
Hylton Heard, +1-212-908-0214
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com