OREANDA-NEWS. As part of its ongoing surveillance, Fitch Ratings has affirmed the following notes issued by Mercedes-Benz Master Owner Trust (MBMOT) as a result of its annual review of the trust:

MBMOT, Series 2015-A

--$475,000,000 class A notes at 'AAAsf'; Outlook Stable

MBMOT, Series 2015-B

--$525,000,000 class A notes at 'AAAsf'; Outlook Stable

MBMOT, Series 2016-A

--$375,000,000 class A notes at 'AAAsf'; Outlook Stable

MBMOT, Series 2016-B

--$375,000,000 class A notes at 'AAAsf'; Outlook Stable


Strong Receivables Quality: The dealer floorplan (DFP) receivables are backed by approximately 91% new Mercedes-Benz vehicles, as well as a small portion of used vehicles and those of other manufacturers.

Asset Concentration Limits: Dealers are subject to concentration limits, mitigating the risk of individual dealer defaults and losses. Overexposure to individual vehicle types, dealer credit ratings and state concentrations is mitigated by concentration limits. Per the transaction documents, incremental overcollateralization will be added to each series in the event of a limit breach.

Strong Dealer Network: Current dealer performance, financial metrics and overall health of the MB dealer network are strong, with the majority of dealers profitable in 2016. Consistent with the majority of dealers in the U. S., MB dealers have benefitted from historically high sales levels over the past three years.

Strong Trust Performance: MBMOT continues to exhibit positive trends in overall performance metrics, including stable monthly payment rates (MPRs) and asset yields with low receivables aging and no dealer defaults or trust losses.

Sufficient Credit Enhancement: Hard credit enhancement (CE) for the class A notes totals 16.96% and 16.88% for 2015-A/B and 2016-A/B, respectively. Structural features, including early amortization triggers, mitigate risks stemming from dealer/manufacturer defaults/bankruptcies.

Consistent Origination and Servicing: Mercedes-Benz Financial Services USA (MBFS USA) demonstrates adequate abilities as an originator, underwriter and servicer, as evidenced by the historical performance of the managed portfolio and MBMOT.

Legal Structure Integrity: The legal structure of the transaction provides that a bankruptcy of MBFS USA would not impair the timeliness of payments on the securities.


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.

However, to date, performance for the trust has remained strong. A material deterioration would have to occur in performance to have potential negative impact on the ratings for each series.


Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to these rating actions.