Fitch Affirms Outstanding Classes for John Deere Owner Trust 2013-B
OREANDA-NEWS. Fitch Ratings affirms all outstanding classes of John Deere Owner Trust 2013-B at 'AAAsf'. The Rating Outlook is Stable. A full list of rating actions follows at the end of this ratings action commentary.
KEY RATING DRIVERS
The affirmation of the remaining notes reflects loss coverage consistent with the current ratings. The transaction has continued to perform within Fitch's cumulative net loss (CNL) expectations to date. As of April 2016 payment date, CNL for the 2013-B transaction stood at 26 basis points.
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss expectations, subsequently impacting available loss coverage. Lower loss coverage could impact ratings and rating outlooks, depending on the extent of the decline in coverage. In Fitch's initial review of the transaction, the notes were found to have limited sensitivity to 1.5x and 2.5x higher of Fitch's base case loss expectations. Initial key rating drivers and rating sensitivities are further described in the presale report dated Aug. 26, 2013.
To date, the transaction has exhibited strong performance with losses within Fitch's initial expectations with rising loss coverage and multiple levels. As a result, continued strong performance for the transaction would most likely result in stable ratings. Conversely, a material deterioration in performance would have to occur within the asset pools to have potential negative impact on the outstanding ratings.
Fitch's analysis of the Representations and Warranties (R&W) JDOT 2013-B can be found in 'John Deere Owner Trust 2013-B - Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated March 2, 2016.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following ratings:
John Deere Owner Trust 2013-B
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable.