OREANDA-NEWS. Fitch Ratings assign the following ratings to the BMW Vehicle Owner Trust 2016-A (BMWOT 2016-A) notes:

--$329,000,000 class A-1 'F1+sf';

--$325,000,000 class A-2a 'AAAsf'; Outlook Stable;

--$125,000,000 class A-2b 'AAAsf'; Outlook Stable;

--$356,000,000 class A-3 'AAAsf'; Outlook Stable;

--$115,000,000 class A-4 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

Strong Collateral Quality: The weighted average (WA) Fair Isaac Corp. (FICO) score of 763 is consistent with prior BMWOT pools and indicates strong borrower credit quality. Extended-term contracts and certified pre-owned (CPO) collateral have slightly decreased from the prior transaction.

Sufficient Credit Enhancement: 2016-A incorporates a sequential-pay structure. Total initial hard credit enhancement (CE) in 2016-A for class A notes is 2.75% (overcollateralization [OC] of 2.50% plus a 0.25% initial reserve), consistent with 2014-A. Yield supplement OC will be used to boost the transaction's annual percentage rate (APR), providing expected excess spread of 3.34%. Hard CE is sufficient to cover Fitch's 'AAAsf' stressed loss expectation.

Strong Portfolio/Securitization Performance: BMWFS's securitizations and serviced portfolio have experienced stable delinquency and loss performance over the past few years following peak levels recorded during the recent recession (2008-2010).

Evolving Wholesale Market: The U. S. wholesale vehicle market is normalizing following strong performance in recent years. Fitch expects increasing used vehicle supply from off-lease vehicles and trade-ins to pressure ABS recovery rates, leading to moderately higher loss rates. Fitch's analysis accounts for this risk by including periods of weak wholesale vehicle market performance in the derivation of its base case loss expectation.

Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of BMWFS would not impair the timeliness of payments on the securities.

Stable Origination/Underwriting/Servicing: Fitch believes BMWFS is a capable originator, underwriter, and servicer for prime auto loan collateral as evidenced by the historical delinquency and loss performance of its securitizations and managed portfolio.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. This in turn could result in potential negative rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to BMWOT 2016-A to increased losses over the life of the transaction. Fitch's analysis found that the class A notes display minimal sensitivity to a moderate increase in defaults and losses, under Fitch's moderate (1.5x base case loss) scenario. However, class A notes could experience downgrades of up to two rating categories under Fitch's severe (2.5x base case loss) scenario.

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 140 receivables. Fitch considered this information in its analysis and the findings did not have an impact on our analysis/conclusions. A copy of the ABS Due Diligence Form-15E received by Fitch in connection with this transaction may be obtained through the link contained on the bottom of the related rating action commentary.