NEW YORK--(BUSINESS WIRE)--As part of its ongoing surveillance, Fitch Ratings has upgraded one and affirmed four outstanding classes of the CarMax Auto Owner Trust 2013-3. A full list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The rating upgrades and 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 CarMax Business Services, LLC's retail auto loan originations, the strength of its servicing capabilities, and the sound financial and legal structure of the transactions.
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 has taken the following rating actions:
CarMax Auto Owner Trust 2013-3
--Class A-3 affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 affirmed at 'AAAsf'; Outlook Stable;
--Class B affirmed at 'AAAsf'; Outlook Stable;
--Class C upgraded to 'AAAsf' from 'AAsf'; Outlook to Stable from Positive;
--Class D affirmed at 'BBBsf'; Outlook to Positive from Stable.
Additional information is available at www.fitchratings.com
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)
Rating Criteria for U.S. Auto Loan ABS (pub. 21 Mar 2016)
CarMax Auto Owner Trust 2013-3 -- Appendix
Dodd-Frank Rating Information Disclosure Form