Fitch to rate BMW Vehicle Owner Trust 2013-A; issues presale


Oct 28 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings expects to assign the following ratings and Outlooks to the BMW Vehicle Owner Trust 2013-A notes:

--$215,000,000 class A-1 'F1+sf';

--$221,000,000 class A-2 'AAAsf'; Outlook Stable;

--$265,000,000 class A-3 'AAAsf'; Outlook Stable;

--$49,000,000 class A-4 'AAAsf'; Outlook Stable.

Key Rating Drivers

Strong Collateral Quality: The weighted average (WA) FICO of 760 is consistent with prior BMWOT transactions and indicates a strong borrower. The pool is also more than 12 months seasoned, and the concentration of new vehicles has increased.

Sufficient Credit Enhancement (CE): 2013-A incorporates a sequential-pay structure. Total initial hard CE in 2013-A for the class A notes is 2.75% (overcollateralization of 2.50% plus a 0.25% [of the initial adjusted receivables balance] initial reserve). Yield supplement OC will be used to boost the transaction's APR, providing expected excess spread of 2.51% per annum. CE is sufficient to cover Fitch's 'AAAsf' stressed loss expectation.

Strong Portfolio/Securitization Performance: In recent years BMWFS' securitizations and serviced portfolio have experienced improved loss performance.

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 expectation.

Stable Origination/Underwriting/Servicing: Fitch believes BMWFS to be a capable originator, underwriter, and servicer for prime auto loan collateral, as evidenced by historical delinquency and loss performance of its securitizations and managed portfolio.

Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of BMW FS would not impair the timeliness of payments on the securities.

Rating Sensitivities

Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case and could result in potential rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to all classes of 2013-A to increased losses over the life of the transaction. Fitch's analysis found that the notes display limited sensitivity to increased defaults and losses, showing limited impact on the rating of the notes under Fitch's moderate (1.5x base case loss) scenario. The notes could experience a downgrade of up to two rating categories under Fitch's severe (2.5x base case loss) scenario.

Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report, available at '' or by clicking on the below link.

Link to Fitch Ratings' Report: BMW Vehicle Owner Trust 2013-A (US ABS)

View Comments (0)