Fitch Ratings expects to assign the following ratings and Outlooks to the notes issued by
KEY RATING DRIVERS
Stable Credit Quality: The 2013-D pool is consistent with prior deals, with a
Adequate Credit Enhancement Structure: The cash flow distribution is a sequential-pay structure, consistent with prior transactions. Initial hard credit enhancement (CE) for the class A notes totals 5.50%, consisting of 7% subordination and a 0.50% nondeclining reserve offset by under-collateralization of 2% on an adjusted pool basis.
Stable Portfolio/Securitization Performance: Delinquencies and losses on Ford Credit's portfolio and 2009-2012 FCAOT securitizations are currently at low levels, supported by the improving (albeit volatile) U.S. economy, and healthy used vehicle values resulting in higher recovery rates.
Positive Corporate Performance: Fitch currently rates the long-term IDR of Ford Motor Company (Ford), the parent of Ford Credit, and Ford Credit 'BBB-' with a Stable Rating Outlook.
Unstable Economic Outlook: 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.
Consistent Origination/Underwriting/Servicing: Ford Credit demonstrates adequate abilities as originator, underwriter and servicer, as evidenced by historical portfolio and securitizations' delinquency and loss performance. Fitch deems Ford Credit an adequate servicer to service 2013-D.
Integrity of Legal Structure: The legal structure of the transaction should provide that a bankruptcy of Ford Credit would not impair the timeliness of 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. This could result in potential 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 detailed in the accompanying 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' (
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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