Fitch Affirms World Omni Master Owner Trust Outstanding Notes; Outlook Stable
Fitch Ratings affirms the following outstanding notes issued by World Omni Master Owner Trust (WOMOT) series 2013-1 as a result of its annual review of the trust:
--$350,000,000 class A notes at 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
Quality of Wholesale Receivables: The trust receivables are backed by more than 90% new vehicles, mainly Toyota brand, along with new and used vehicles from a small number of other OEMs.
Asset Concentrations: Dealers and vehicle types are subject to concentration limits mitigating the risk of individual dealer defaults and losses.
Strength of Dealer Network: The financial health of World Omni Financial Corp.'s (WOFCO) dealer network is viewed as historically strong, with the majority of dealers profitable and financially stable.
Strong Trust Performance: WOMOT experienced high monthly payment rate levels in 2015, benefiting from historically high vehicles sales at dealers within the network. Toyota, as well as the majority of original equipment manufacturers, has reported some of the highest vehicle sales in over a decade for 2015.
Sufficient Credit Enhancement: Current credit enhancement for the class A notes is 24.23% (of the collateral balance), consisting of an available subordinated amount, incremental subordinated amount and cash reserve. Structural features such as early amortization triggers are in place to mitigate risks stemming from dealer defaults or manufacturer bankruptcies.
Consistent Origination and Servicing: WOFCO has adequate abilities as an originator, underwriter, and servicer, as evidenced by the historical trust performance metrics and loss performance.
Current Economic Conditions: The slow U.S. economic recovery and volatility therein could affect the performance of this series. This is mitigated by the conservative analysis, stress assumptions applied and resulting loss coverage, and stable performance to date of WOMOT.
Legal Analysis: The legal structure of the transaction provides that a bankruptcy of WOFCO would not impair the timeliness of payments on the securities.
To conduct a rating sensitivity for the outstanding notes, under a category B DFP platform, Fitch assumes portfolio default levels at 5%, 10%, and 15% and under two recovery-level scenarios of 50% and 30%. Fitch modeled each series with the assumption that the above defaults have occurred, reflecting asset performance in a stressed environment. 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.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)
Global Rating Criteria for Dealer Floorplan ABS (pub. 06 Jan 2015)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
World Omni Master Owner Trust, Series 2013-1 -- Appendix
Dodd-Frank Rating Information Disclosure Form
Timothy McNally, +1-212-908-0870
Fitch Ratings, Inc.
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New York, NY 10004
Du Trieu, +1-312-368-2091
Sandro Scenga, New York, +1-212-908-0278