![]() (Honda), the parent of AHFC, 'A'/F1'/Outlook Stable.įactors that could, individually or collectively, lead to negative rating action/downgrade: Fitch deems AHFC capable of servicing this series. Seller/Servicer Operational Review - Consistent Origination/Underwriting/Servicing: American Honda Finance Corporation (AHFC) demonstrates adequate capabilities as originator, underwriter and servicer, as evidenced by historical portfolio delinquency and loss experience and securitization performance. ![]() Initial CE is sufficient to withstand Fitch's base case CNL proxy at a 5.0x loss coverage multiple for class A notes. A yield supplement account (YSA) is also used and increases the effective WA APR. Initial hard credit enhancement (CE) is 2.75% (subordination of 2.50% and a 0.25% reserve), consistent with the last two transactions and pre-pandemic transactions. Payment Structure - Sufficient Credit Enhancement: The cash flow distribution is a sequential-pay structure. Fitch considered current market conditions and used 2006-2009 recessionary performance in addition to the 2015-2016 vintages, to derive a forward-looking credit loss expectation of 0.90%. However, slightly weakening trends have been observed recently, including slowly rising losses, although this is consistent with the broader market. Honda's managed portfolio and securitization performance in recent years have been very strong and well within expectations. Extended-term loans total approximately 29% and subvented loans represent 79% for each pool, which are in line with recent HAROT transactions.įorward-Looking Approach to Derive Base Case Loss Proxy: Fitch considered economic conditions and future expectations by assessing key macroeconomic and wholesale market conditions when deriving the series loss proxy. ![]() Honda Auto Receivables 2021-3 Owner TrustĬollateral Performance - Strong Credit Quality: The 2021-3 pool is largely consistent with recent transactions with a high weighted average (WA) FICO score of 771 and approximately 91% new vehicles, for each pool. The sensitivity of the ratings to scenarios more severe than currently expected is provided in the Rating Sensitivities section below. Fitch Ratings has assigned final ratings and Rating Outlooks to the asset-backed notes issued by Honda Auto Receivables 2021-3 Owner Trust (HAROT 2021-3).įitch used 2006-2009 recessionary vintage performance along with the more recent 2015-2016 vintage performance data as base periods to derive and forecast the base case cumulative net loss (CNL) proxy. ![]()
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