2012-1: Class A at 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
Good Quality of Receivables: The trust receivables include loans backed by mostly new vehicles, strong internal dealer ratings and health, and are geographically diverse.
Asset Concentrations: Dealers and manufacturers are subject to concentration limits, mitigating the risk of individual dealer defaults and losses. Further, the exposure to individual vehicle type, model or segment is mitigated with concentration limits in place.
Strong Dealer Network: Based on a review of dealer financial metrics and BMW FS' internal dealer risk ratings, which are categorized into eight distinct groups, the financial health of the participating dealer network in viewed as currently strong with the majority of dealers being profitable in 2014.
Strong Trust Performance: BMW FMOT has continued to experience positive trends in overall performance, including strong monthly payment rates (MPR), consistent asset yields, low agings/delinquencies and minimal dealer defaults and trust losses.
Adequate Credit Enhancement: Class A CE is 29.92% (of the notes) comprising of required subordination amount of 25.47% and 0.25% (reserve account fully funded). Structural features like early amortization triggers mitigate events of dealer/manufacturer defaults/bankruptcies.
Consistent Origination and Servicing: BMW FS has demonstrated adequate abilities as an originator, underwriter, and servicer, as evidenced by the historical delinquency and loss performance of BMW FMNT.
Legal Structure Integrity: The legal structure of the transaction provides that a bankruptcy of BMW FS would not impair the timeliness of payments on the securities.
The rating actions are based on the application of Fitch's global Dealer Floorplan (DFP) ABS criteria, and the loss coverage levels provided by the structure's credit enhancement. Fitch's review of the assumptions and stresses during this review are relatively consistent with the initial rating review. The current coverage levels are consistent with the approach outlined in the criteria for Category B DFP platforms. BMW FMOT is assigned 'Category B'.
Fitch will continue to monitor BMW FMOT and may take additional rating actions in the event of changes in trust performance and/or credit enhancement.
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.
To date, trust performance metrics are stable. A material deterioration in performance metrics would have to occur in performance to have a potential negative impact on ratings.
Fitch's analysis of the Representation and Warranties (R&W) of this transaction can be found in 'BMW Floorplan Master Owner Trust, Series 2012-1 -- 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
Additional information is available at 'www.fitchratings.com'.
--'Global Rating Criteria for Dealer Floorplan ABS' (
--'Global Structured Finance Rating Criteria' (
Global Rating Criteria for Dealer Floorplan ABS
Global Structured Finance Rating Criteria - Effective from
Source: Fitch Ratings
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