Fitch Affirms One & Upgrades Three Classes of Ally Auto Receivables 2014-3
OREANDA-NEWS. As part of its ongoing surveillance, Fitch Ratings has affirmed one class and upgraded three classes of the Ally Auto Receivables Trust 2014-3 as follows:
--Class A2 notes affirmed at 'AAAsf'; Outlook Stable;
--Class A3 notes affirmed at 'AAAsf'; Outlook Stable;
--Class A4 notes affirmed at 'AAAsf'; Outlook Stable;
--Class B notes upgraded to 'AAAsf'from 'AAsf'; Outlook Stable;
--Class C notes upgraded to 'AAsf' from 'Asf'; Outlook to Positive from Stable;
--Class D notes upgraded to 'Asf' from 'BBBsf'; Outlook to Positive from Stable.
KEY RATING DRIVERS
The rating actions are based on available credit enhancement (CE) and loss performance to date. The collateral pool continues to perform within Fitch's expectations. Under the current structure and CE, the securities are able to withstand stress scenarios consistent with the assigned ratings and make full payments to investors in accordance with the terms of the documents.
The ratings reflect the quality of Ally Financial's (AFIN) retail auto loan originations, the sound financial and legal structure of the transaction, and the strength of the servicing provided by AFIN.
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxies and impact available loss coverage and multiples levels for the transactions. Lower loss coverage could affect the ratings and Rating Outlooks depending on the extent of the decline in coverage.
In Fitch's initial review of the transactions, the notes were found to have limited sensitivity to a 1.5x and 2.5x increase of Fitch's base case loss expectations. To date, the transactions have exhibited strong performance with losses well within Fitch's initial expectations, with rising loss coverage and multiple levels. As such, a material deterioration in performance would have to occur within the asset pools to have potential negative impact on the outstanding ratings.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch's analysis of the Representation and Warranties (R&W) of this transaction can be found in Ally Auto Receivables Trust 2013-2 -- 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 June 12, 2015.