DBRS Morningstar Confirms Ratings on Ford Auto Securitization Trust 2018-A

DBRS Limited (DBRS Morningstar) confirmed the ratings on the following notes issued by Ford Auto Securitization Trust 2018-A as part of DBRS Morningstar’s continued effort to provide market participants with updates on an annual basis:

-- Asset-Backed Notes, Series 2018-A, Class A-2 (the Class A-2 Notes) at AAA (sf)
-- Asset-Backed Notes, Series 2018-A, Class A-3 (together with the Class A-2 Notes, the Class A Notes) at AAA (sf)

The Asset-Backed Notes, Series 2018-A, Class B and Class C are unrated (together with the Class A Notes, the Notes).

The Notes are supported by a portfolio of retail loan contracts and related rights secured by new and used passenger cars, light trucks, and utility vehicles (the Portfolio of Receivables). The loan contracts in the Portfolio of Receivables were originated by the Seller (Ford Credit Canada Company; rated BBB with a Negative trend by DBRS Morningstar) through its authorized dealer network.

The confirmation of the ratings is based on performance of the transaction as of December 2019:

(1) Total credit enhancement levels available to the Class A Notes, measured as a percentage of the outstanding Note balance, have increased from initial levels to 17.2%.

(2) Excess spread, net of losses, has grown to approximately 6.5%.

(3) To date, cumulative losses amounted to 45 basis points of the Initial Pool Balance and are below DBRS Morningstar’s expectations set at the time of the initial rating.

(4) Ford Credit Canada Limited (FCCL) has extensive experience in the origination and servicing of retail auto loan securitization transactions backed by those assets. A performance guarantee is provided by FCCL’s parent, Ford Motor Credit Company LLC (rated BBB with a Negative trend by DBRS Morningstar).

DBRS Morningstar monitors the performance of each transaction to identify any deviation from DBRS Morningstar’s expectation at issuance and to ensure the ratings remain appropriate. The review is predicated upon the timely receipt of performance information from the related providers. The performance and characteristics of each publicly rated auto loan portfolio and the Notes are available and updated each month in the Monthly Canadian ABS Report, which is available at www.dbrs.com.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is Master Canadian Structured Finance Surveillance Methodology (June 2019), which can be found on dbrs.com under Methodologies & Criteria.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at [email protected].

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at [email protected].

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