Fitch Ratings expects to assign the following rating to
Key Rating Drivers
Quality of Wholesale Receivables: The trust receivables backing this series have a high percentage of floorplan loans backing new vehicles (90.3%) and strong aging distribution, with only 4.6% of inventory aged past 270 days. The receivables are geographically diverse.
Asset Concentrations: Dealers are subject to concentration limits pertaining to certain vehicle types, manufacturers, and segments, mitigating the risk of individual dealer defaults and losses.
Strength of Dealer Network: Based on a review of dealer financial metrics, the financial health of Ally's dealer network in 2014 is stable, with the majority of dealers profitable through
Sufficient Credit Enhancement: Initial credit enhancement (CE) for the class A notes is 26.5% (25.5% subordination and 1% reserve account, both of initial note balance), consistent with the prior 2014 series issued. Structural features such as early amortization triggers mitigate risks of dealer/manufacturer defaults/bankruptcies.
Consistent Origination and Servicing: Ally demonstrates adequate abilities as originator, underwriter and servicer, as evidenced by the historical delinquency and loss performance of AMOT. Fitch rates Ally's long-term Issuer Default Rating 'BB+' with a Stable Outlook.
Slow Economic Recovery: The slow U.S. economic recovery and volatility therein could affect the performance of this series. This is mitigated by the conservative analysis, stress assumptions applied and resulting loss coverage, and stable performance to date of AMOT.
Legal Analysis: The legal structure of the transaction provides that a bankruptcy of Ally would not impair the timeliness of payments on the securities.
To conduct rating sensitivity for the issued notes, under a category B Dealer Floorplan platform, Fitch assumes portfolio default levels at 10%, 25%, and 40%, and under two recovery-level scenarios of 50% and 30%. Fitch modeled the series with the assumption that the above defaults have occurred and recoveries stressed accordingly, reflecting asset performance in a stressed environment. Remaining expected loss levels were compared with the stressed loss assumption grid commensurate with various rating levels.
Fitch's analysis of the Representation and Warranties (R&W) of this transaction can be found in 'Ally Master Owner Trust, Series 2014-4 -- Appendix'. 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
The presale report is available to all investors on Fitch's website at 'www.fitchratings.com'. For more information about Fitch's comprehensive subscription service FitchResearch, which includes all presale reports, surveillance, and credit reports on more than 20 asset classes, contact product sales at +1-212-908-0800 or at 'firstname.lastname@example.org'.
Additional information is available at 'www.fitchratings.com'.
--'Global Rating Criteria for Dealer Floorplan ABS' (
--'Global Structured Finance Rating Criteria' (
Global Structured Finance Rating Criteria
Global Rating Criteria for Dealer Floorplan ABS
Khadija El Mediouri, +1 212-908-0109
Source: Fitch Ratings
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