NEW YORK--(BUSINESS WIRE)--As part of its ongoing surveillance, Fitch Ratings affirms eight and upgrades two classes from the Ford Credit Auto Owner Trust (FCAOT) 2013-A and 2013-C. A full list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The rating upgrades of the applicable classes in the series 2013-A and 2013-C transactions are a result of strong loss coverage under Fitch's assumptions and stresses in cash flow modeling. The affirmations on the remaining notes in the transactions reflect loss coverage levels consistent with current ratings. The transactions have continued to perform well within Fitch's cumulative net loss expectations to date.
The ratings reflect the quality of Ford Motor Credit Company's (FMCC) retail auto loan originations, the sound financial and legal structure of the transaction, and the strength of the servicing provided by FMCC.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxies and impact available loss coverage and multiples levels for the transactions. Lower loss coverage could impact the ratings and Rating Outlooks depending on the extent of the decline in coverage.
In Fitch's initial review of the transactions, the notes were found to have limited sensitivity to a 1.5x and 2.5x increase of Fitch's base case loss expectations. To date, the transactions have exhibited strong performance with losses well within Fitch's initial expectations with rising loss coverage and multiple levels. As such, a material deterioration in performance would have to occur within the asset pools to have potential negative impact on the outstanding ratings.
Fitch's analysis of the Representation and Warranties (R&W) of the transactions in this review can be found in the respective appendices listed below. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in the Global Structured Finance Transactions' dated Mar. 26, 2015.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed and upgraded the following ratings:
2013-A:
--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 affirmed at 'AAAsf'; Outlook Stable;
--Class D upgraded to 'AAAsf' from 'AAsf'; Outlook revised to Stable from Positive.
2013-C:
--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 affirmed at 'AAAsf'; Outlook Stable;
--Class D upgraded to 'AAAsf' from 'AAsf'; Outlook revised to Stable from Positive.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
Rating Criteria for U.S. Auto Loan ABS (pub. 10 Apr 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863979
Related Research
Ford Credit Auto Owner Trust 2013-A -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701687
Ford Credit Auto Owner Trust 2013-C -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=714315
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990399
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990399
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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