News Column

Fitch Affirms John Deere Owner Trusts 2012-B & 2013-B

July 1, 2014

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings affirms John Deere Owner Trusts (JDOT) 2012-B and 2013-B as follows:

JDOT 2012-B

--Class A-3 at 'AAAsf'; Outlook Stable;

--Class A-4 at 'AAAsf'; Outlook Stable.

JDOT 2013-B

--Class A-2 at 'AAAsf'; Outlook Stable;

--Class A-3 at 'AAAsf'; Outlook Stable;

--Class A-4 at 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

The affirmations of the class A notes for both transactions reflect loss coverage levels consistent with the current ratings. As of the June 2014 reporting period, cumulative net losses totaled 8 basis points (bps) and 3 bps for JDOT 2012-B and 2013-B, respectively. Both transactions are forecasting below each of Fitch's initial base case proxies. The Stable Outlook for all classes reflects Fitch's expectation for loss coverage and credit enhancement to improve as the transactions amortize.

RATING SENSITIVITY

Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxies, which would impact available loss coverage. Lower loss coverage could impact ratings and rating outlooks, depending on the extent of the decline in coverage. In Fitch's initial review of each transaction, the notes were found to have limited sensitivity to 1.5x and 2.5x augmentations to Fitch's base case loss expectations. Initial key rating drivers and rating sensitivities are further described in the new issue reports published March 4, 2012 for JDOT 2012-B and Aug. 26, 2013 for JDOT 2013-B.

To date, the transactions have exhibited strong performance with losses below Fitch's initial expectations, rising loss coverage, and multiples that are consistent with Fitch's 'AAAsf' range. As such, continued strong performance for both transactions would result in continued stable ratings. Conversely, 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 Representations and Warranties (R&W) of JDOT 2012-B and 2013-B can be found in the following appendices: 'John Deere Owner Trust 2012-B- Appendix' and 'John Deere Owner Trust 2013-B- Appendix'. These R&Ws are compared to those of typical R&Ws for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated April 17, 2012.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Criteria for Rating U.S. Equipment Lease and Loan ABS' dated Dec. 19, 2013;

--'Global Structured Finance Rating Criteria' dated May 20, 2014;

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated April 17, 2012;

--'John Deere Owner Trust 2012-B' dated March 4, 2012;

-- 'John Deere Owner Trust 2012-B- Appendix' dated March 4, 2012;

--'John Deere Owner Trust 2013-B' dated Aug. 26, 2013;

--'John Deere Owner Trust 2013-B - Appendix' dated Aug. 26, 2013.

Applicable Criteria and Related Research:

Criteria for Rating U.S. Equipment Lease and Loan ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726362

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

John Deere Owner Trust 2012-B

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736457

John Deere Owner Trust 2012-B -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=737257

John Deere Owner Trust 2013-B (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=717038

John Deere Owner Trust 2013-B -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=717206

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=837502

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.



Fitch Ratings, Inc.

Primary Analyst:

Andrew Tinari, +1-312-368-3127

Analyst

70 W. Madison Street

Chicago, IL 60602

or

Secondary Analyst:

Du Trieu, +1-312-368-2091

Senior Director

or

Committee Chairperson:

Bradley Sohl, +1-212-908-0792

Senior Director

or

Sandro Scenga, +1-212-908-0278

Media Relations, New York

sandro.scenga@fitchratings.com


Source: Fitch Ratings


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