DBRS Publishes Updated Methodology for Rating Canadian Floorplan Securitizations

DBRS has today released an updated methodology for rating Canadian floorplan securitizations. The publication of this methodology is part DBRS’s ongoing efforts to provide greater transparency in the marketplace.

While the assets supporting floorplan financing vary from consumer products to commercial equipment, to date, the Canadian securitization market has focused on floorplan transactions where the inventory has consisted of automotive vehicles and their related parts or equipment and agricultural machinery and their related parts. As part of its rating process, DBRS reviews the structure of the transaction and various transaction triggers related to the financial health of the relevant transaction parties. This includes portfolio-level historical performance analysis, servicer analysis, economic analysis and analysis of the legal documents.

The methodology also incorporates an appendix with detailed tables summarizing the key points of the rating process. The purpose of the summary is to provide market participants with an easy-to-follow overview of the issues considered for floorplan transactions and the criteria that form the rationale behind DBRS’s rating opinions.

DBRS has taken no rating actions as a result of the updated methodology.

The methodologies providing DBRS's processes and criteria are available by contacting us at info@dbrs.com.