Fitch Rates BMW Floorplan Master Owner Trust 2015-1; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings assigns the following ratings and Rating Outlooks to BMW Floorplan Master Owner Trust Series 2015-1 as follows:

--$900,000,000 class A 'AAAsf'; Outlook Stable;

--$38,180,000 class B Not Rated.

KEY RATING DRIVERS

Good Quality of Receivables: The trust receivables include 85% loans backed by new vehicles and mainly BMW, MINI, and other OEM new and used vehicles.

Asset Concentrations Exist: Dealers are subject to specific concentration limits, mitigating the risk of individual dealer defaults and losses. The exposure to individual vehicle types, dealer credit ratings, and state concentrations are mitigated with concentration limits. Currently, all metrics are within individual concentration limits consistent with prior periods.

Strong Dealer Network: Based on a review of dealer financial metrics and BMW FS's internal dealer risk ratings (categorized into nine distinct groups), the financial health of the participating dealer network is currently viewed as strong, with the majority of dealers profitable in 2015.

Strong Trust Performance: BMW FMOT has continued to experience positive trends in overall performance, including strong monthly payment rates (MPRs) and elevated asset yields, low agings and delinquencies, and no dealer defaults and trust losses.

Sufficient Credit Enhancement: Initial credit enhancement (CE) for the class A notes is 16.52% (of the pool), consisting of 3.55% class B note subordination, 12.75% required subordinated amount (RSA), and a 0.22% reserve account (all of the initial pool balance). Structural features including early amortization triggers mitigate risks stemming from dealer/manufacturer defaults/bankruptcies.

Consistent Origination and Servicing: BMW FS demonstrates adequate abilities as an originator, underwriter, and servicer, as evidenced by the historical delinquency and loss performance of BMW FS' total U.S. portfolio and BMW FMOT.

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.

RATING SENSITIVITIES

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 these 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.

DUE DILIGENCE USAGE

Fitch was provided with third-party due diligence information from KPMG LLP. The third-party due diligence focused on comparing or recalculating certain information with respect to 25 dealer accounts, five center groups and 50 vehicles (10 randomly selected vehicles for each center group), all randomly selected from the final data file. Fitch considered this information in its analysis and the findings did not have an impact on our analysis. A copy of the Form ABS Due Diligence-15E Certification of Provider of Third-Party Due Diligence Services for Asset-Backed Securities received by Fitch in connection with this transaction may be obtained through the link contained on the bottom of the related rating action commentary (RAC).

Fitch's analysis of the Representation and Warranties (R&W) of these transactions can be found in 'BMW Floorplan Master Owner Trust, Series 2015-1 Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in Fitch's Oct. 31, 2014 special report, 'Representations, Warranties, and Enforcement Mechanisms in the Global Structured Finance Transactions'.

The presale report is available to all investors at 'www.fitchratings.com' or by clicking on the above link.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Rating Criteria for Dealer Floorplan ABS (pub. 06 Jan 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=833468

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Related Research

BMW Floorplan Master Owner Trust 2012 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=688583

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=988341

ABS Due Diligence Form 15E 1

https://www.fitchratings.com/creditdesk/press_releases/content/ridf15E_frame.cfm?pr_id=988341&flm_nm=15e_988341_1.pdf

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=988341

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150722006145/en/

Fitch Ratings
Primary Analyst
Puloma Mukherjee
Associate Director
+1-212-908-9131
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Hylton Heard
Senior Director
+1-212-908-0109
or
Committee Chairperson
Du Trieu
Senior Director
+1-312-368-2091
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: [email protected]

Source: Fitch Ratings

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