DBRS Morningstar Confirms Ratings on Ford Auto Securitization Trust 2019-A

DBRS Limited (DBRS Morningstar) confirmed the ratings on the following notes issued by Ford Auto Securitization Trust 2019-A as part of DBRS Morningstar’s continued effort to provide market participants with updates on an annual basis:

-- Asset-Backed Notes, Series 2019-A, Class A-2 (the Class A-2 Notes) at AAA (sf)
-- Asset-Backed Notes, Series 2019-A, Class A-3 (together with the Class A-2 Notes, the Class A Notes) at AAA (sf)

The Asset-Backed Notes, Series 2019-A, Class B and Class C are unrated (together with the Class A Notes, the Notes).

The Notes are supported by a portfolio of prime retail loan contracts originated by Ford Credit Canada Company (Ford Credit Canada; rated BB (high) with a Negative trend and R-4 with a Stable trend by DBRS Morningstar) and secured by new and used passenger cars, light trucks, and utility vehicles.

DBRS Morningstar initially published its outlook on the Coronavirus Disease (COVID-19) pandemic’s impact on key economic indicators for the 2020–22 time frame in April 2020. DBRS Morningstar last updated the macroeconomic scenarios on December 2, 2020, in its “Global Macroeconomic Scenarios: December Update” at https://www.dbrsmorningstar.com/research/370672. For the rated Notes, DBRS Morningstar considered impacts consistent with the moderate scenario in the referenced commentary in its analysis. The rating confirmations are based on the following factors as of November 2020:

(1) Total credit enhancement levels available to the Class A Notes, measured as a percentage of the outstanding Note balance, have increased to 15.2% from initial levels.

(2) Excess spread, net of losses, has grown to approximately 6.7%.

(3) To date, cumulative losses amounted to 32 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 has extensive experience in administrating, servicing, and managing securitizations, as demonstrated by its long track record of Ford Auto Securitization Trust transactions since 2009, all of which performed or are performing within expectations. A performance guarantee is provided by Ford Credit Canada’s parent, Ford Motor Credit Company LLC (rated BB (high) 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.dbrsmorningstar.com.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

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

The principal methodology is Master Canadian Structured Finance Surveillance Methodology (August 31, 2020), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

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.dbrsmorningstar.com or contact us at [email protected].

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