$1.6 billion of asset-backed securities affected
New York, November 15, 2010 -- Moody's Investors Service has assigned definitive ratings of Prime-1
(sf) and Aaa (sf) to the four classes of senior notes issued by Honda
Auto Receivables 2010-3 Owner Trust (HAROT 2010-3).
$418,000,000, 0.31004%, Class
A-1 Asset Backed Notes, rated Prime-1 (sf)
$399,000,000, 0.53%, Class
A-2 Asset Backed Notes, rated Aaa (sf)
$479,000,000, 0.70%, Class
A-3 Asset Backed Notes, rated Aaa (sf)
$263,989,000, 0.94%, Class
A-4 Asset Backed Notes, rated Aaa (sf)
RATINGS RATIONALE
The principal methodology used in rating the transaction was Moody's
Approach to Rating U.S. Auto Loan-Backed Securities,
ratings methodology published in June 2007.
Moody's median cumulative net loss expectation is 0.80%
and the Volatility Proxy Aaa Level is 5.00% for the HAROT
2010-3 pool. Moody's net loss expectation and Volatility
Proxy Aaa Level for the HAROT 2010-3 transaction is based on an
analysis of the credit quality of the underlying collateral, historical
performance trends, the ability of American Honda Finance Corporation
(AHFC) to perform the servicing functions, and current expectations
for future economic conditions.
The V Score for this transaction is Low, which is slightly lower
than the Low/Medium V score assigned for the U.S. Prime
Retail Auto Loan ABS sector. The V Score indicates "Low" uncertainty
about critical assumptions. While AHFC's variability of performance
and degree of disclosure are generally consistent with that of the sector,
the transaction's subcomponent score for Complexity and Market Value
Sensitivity is better than the overall sector given the lower recovery
variability of Honda collateral relative to the sector. Additionally,
back-up servicer risk is viewed as Low compared to the sector score
of Low/Medium given AHFC's financial stability is strong,
as evidenced by their long-term A1 rating and P-1 rating.
Moody's V Scores provide a relative assessment of the quality of
available credit information and the potential variability around the
various inputs to a rating determination. The V Score ranks transactions
by the potential for significant rating changes owing to uncertainty around
the assumptions due to data quality, historical performance,
the level of disclosure, transaction complexity, the modeling
and the transaction governance that underlie the ratings. V Scores
apply to the entire transaction (rather than individual tranches).
Moody's Parameter Sensitivities: If the net loss used in determining
the initial rating were changed to 1.50%, 2.75%,
or 4.00%, the initial model-indicated output
for the Class A notes might change from Aaa to Aa1, A1, and
Baa1, respectively.
Parameter Sensitivities are not intended to measure how the rating of
the security might migrate over time, rather they are designed to
provide a quantitative calculation of how the initial rating might change
if key input parameters used in the initial rating process differed.
The analysis assumes that the deal has not aged. Parameter Sensitivities
only reflect the ratings impact of each scenario from a quantitative/model-indicated
standpoint. Qualitative factors are also taken into consideration
in the ratings process, so the actual ratings that would be assigned
in each case could vary from the information presented in the Parameter
Sensitivity analysis.
Moody's Investors Service did not receive or take into account a third
party due diligence report on the underlying assets or financial instruments
in this transaction.
REGULATORY DISCLOSURE
Information sources used to prepare the credit ratings are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, and confidential and proprietary Moody's Investors
Service's information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of assigning
a credit rating. However, the credit rating action was based
on limited historical data.
Additional research including a pre-sale report for this transaction
is available at www.moodys.com. The special reports,
"Updated Report on V Scores and Parameter Sensitivities for Structured
Finance Securities" and "V Scores and Parameter Sensitivities in the U.S.
Vehicle ABS Sector" are also available on moodys.com. In
addition, Moody's publishes a weekly summary of structured finance
credit, ratings and methodologies, available to all registered
users of our website, at www.moodys.com/SFQuickCheck.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
New York
Keith Van Doren
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Mack Caldwell
Senior Vice President
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
Moody's assigns definitive ratings to Honda Auto Receivables 2010-3 Owner Trust
