Fitch Ratings assigns ratings and Rating Outlooks to the notes issued by
KEY RATING DRIVERS
Consistent Credit Quality: CAOT 2014-1 has consistent credit quality compared to pools securitized since 2011 exhibiting similar weighted average (
Increased Credit Enhancement: While initial hard credit enhancement in CAOT 2014-1 is similar to recent transactions; the class B and C notes show an increase and the target enhancement has increased for all classes. Initial credit enhancement is sufficient to withstand Fitch's base case cumulative net loss proxy of 2.40% for all classes of notes at each classes' respective loss coverage multiple.
Stable Portfolio/Securitization Performance: Losses on CAF's portfolio and 2010-2013 securitizations have remained below peak levels seen in 2008 due to stronger quality originations and elevated used vehicle values, which have supported higher recovery rates.
Uncertain Macroeconomic Conditions: A slower recovery and potential for volatility could affect delinquencies and losses. Fitch's analysis accounts for this risk by including poorer performing vintages from the recent recession in the base case loss analysis.
Stable Origination, Underwriting, and Servicing: Fitch believes CAF demonstrates adequate abilities as originator, underwriter, and servicer to service CAOT 2014-1.
Integrity of the Legal Structure: The legal structure of the transaction should provide that a bankruptcy of CAF would not impair the timeliness of the payments on the securities.
Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. In turn, it could result in potentially adverse rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to all classes of
Key Rating Drivers and Rating Sensitivities are further described in Fitch's presale report, available at www.fitchratings.com or by clicking on the above link.
Additional information is available at www.fitchratings.com.
--'Global Structured Finance Rating Criteria' (
--'Rating Criteria for U.S. Auto Loan ABS' (
--'Structured Finance Tranche Thickness Metrics' (
--'CarMax Auto Owner Trust 2014-1 Appendix (
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Auto Loan ABS
Structured Finance Tranche Thickness Metrics
Source: Fitch Ratings
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