Fitch Ratings expects to assign the following ratings and Outlooks to Ally Master Owner Trust series 2015-1 and 2015-2 as follows:
Series 2015-1
--$300,000,000 class A 'AAAsf'; Outlook Stable.
Series 2015-2
--$200,000,000 class A-1/A-2 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
Quality of Wholesale Receivables: The trust receivables backing this series have a high percentage of floorplan loans backing new vehicles (90.3%) and strong aging distribution, with only 5.9% of inventory aged past 270 days. The receivables are geographically diverse.
Adequate Diversification: The top 20 dealers in the trust represent 13.3% of the receivables balance as of Jan. 6, 2015. Dealers are subject to concentration limits, mitigating the risks associated with individual dealer defaults and losses. Concentration limits are also in place to limit exposure to individual vehicle types, manufacturers and segments.
Strength of Dealer Network: Based on a review of dealer financial metrics, the financial health of Ally's dealer network in 2014 is stable, with the majority of dealers profitable at income levels historically high through the third quarter. The U.S. unemployment rate and other domestic macroeconomic indicators drove auto sales historically higher in 2014, which benefitted auto manufacturers and dealers nationwide.
Stable Trust Performance: AMOT is experiencing consistent performance trends, including stable MPRs, low agings and minimal dealer defaults. However, due to increased competition in the floorplan lending market, yields have decreased each year since 2011, averaging 4.03% in 2014.
Sufficient Credit Enhancement: Initial credit enhancement (CE) for the class A notes is 26.5% (25.5% subordination and 1% reserve account, both of initial note balance), consistent with the prior 2014 series issued. Structural features such as early amortization triggers mitigate risks of dealer/manufacturer defaults/bankruptcies.
Consistent Origination and Servicing: Ally demonstrates adequate abilities as originator, underwriter and servicer, as evidenced by loss performance and limited exposure to dealer defaults.
Legal Analysis: The legal structure of the transaction provides that a bankruptcy of Ally 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.
Fitch's analysis of the Representation and Warranties (R&W) of these transactions can be found in 'Ally Master Owner Trust, Series 2015-1 & Series 2015-2 -- Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in Fitch's October 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 and Related Research:
--'Global Rating Criteria for Dealer Floorplan ABS' (Jan. 6, 2015);
--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);
--'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transaction' (Oct. 31, 2014);
--'Ally Master Owner Trust, Series 2015-1 & Series 2015-2 -- Appendix' (Jan. 30, 2015);
--'Ally Master Owner Trust, Series 2015-1 & Series 2015-2' (Jan. 30, 2015).
Applicable Criteria and Related Research: Ally Master Owner Trust,
Series 2015-1 & Series 2015-2
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=861427
Global Rating Criteria for Dealer Floorplan ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=833468
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
Representations, Warranties and Enforcement Mechanisms in Global
Structured Finance Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=978945
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.
