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Rating Action:

Moody's upgrades CarMax 2007 and 2008 prime auto loan ABS

29 Mar 2011

Approximately $166 million of asset-backed securities affected

New York, March 29, 2011 -- Moody's Investors Service has upgraded eight subordinate tranches from six auto loan transactions issued in 2007 and 2008 by CarMax Business Services LLC ("CarMax"). These rating actions were build-up in credit enhancement supporting each of the securities subject to this action under the sequential-pay structures.

RATINGS:

Issuer: CarMax Auto Owner Trust 2007-1

Cl. C, Upgraded to Aaa (sf); previously on Feb 15, 2011 A2 (sf) Placed Under Review for Possible Upgrade

Issuer: Carmax Auto Owner Trust 2007-2

Cl. C, Upgraded to Aaa (sf); previously on Feb 15, 2011 Baa1 (sf) Placed Under Review for Possible Upgrade

Issuer: Carmax Auto Owner Trust 2007-3

Cl. B, Upgraded to Aaa (sf); previously on Feb 15, 2011 Aa1 (sf) Placed Under Review for Possible Upgrade

Cl. C, Upgraded to Aa2 (sf); previously on Feb 15, 2011 Baa3 (sf) Placed Under Review for Possible Upgrade

Issuer: CarMax Auto Owner Trust 2008-1

Cl. B, Upgraded to Aaa (sf); previously on Feb 15, 2011 Aa1 (sf) Placed Under Review for Possible Upgrade

Cl. C, Upgraded to A1 (sf); previously on Feb 15, 2011 Baa3 (sf) Placed Under Review for Possible Upgrade

Issuer: CarMax Auto Owner Trust 2008-2

Cl. C, Upgraded to Aaa (sf); previously on Feb 15, 2011 Aa3 (sf) Placed Under Review for Possible Upgrade

Issuer: Carmax Auto Owner Trust 2008-A

Cl. B, Upgraded to Aaa (sf); previously on Feb 15, 2011 Aa1 (sf) Placed Under Review for Possible Upgrade

RATINGS RATIONALE

The rating actions are primarily a result of build up in credit enhancement relative to remaining losses due to the non-declining reserve accounts and sequential payment structure of the transactions.

Moody's expects CarMax Auto Owner Trust 2007-1, 2007-2 and 2007-3 transactions to incur lifetime cumulative net losses (CNL) of 4.10% which is toward the middle of the previous range of 4.00% to 4.25% when the securities were placed on review in February. Total hard credit enhancement (that excludes excess spread) for Cl. B upgraded tranche is approximately 18% of outstanding collateral balance. Total hard credit enhancement (that excludes excess spread) for Cl. C upgraded tranches are approximately 10%, 7% and 6%, respectively, of the outstanding collateral balance. Excess spread for the transactions range between 4.3% and 5.0% per annum, of outstanding collateral balance. Pool factors for the transactions are 10%, 14% and 18%, respectively, of the outstanding collateral balance. Moody's Aaa level for the transactions is approximately 9%, 9% and 10%, respectively, of the remaining collateral balance. The Aaa level is the level of credit enhancement that would be consistent with a Aaa rating for the given asset pool.

Moody's expects CarMax Auto Owner Trust 2008-1 transaction to incur CNL of 4.30% which is at the low end of the previous range of 4.25% to 4.75% when the securities were placed on review in February. Total hard credit enhancement (that excludes excess spread of approximately 4.2% per annum) for Cl. B and Cl. C upgraded tranches is approximately 14% and 4%, respectively, of the outstanding collateral balance. Pool factor for the transaction is 24% of the outstanding collateral balance. Moody's Aaa level for the transaction is approximately 11% of the remaining collateral balance

Moody's expects CarMax Auto Owner Trust 2008-A transaction to incur lifetime CNL of 3.90% which is at the high end of the previous range of 3.50% to 4.00% when the security was placed on review in February. Total hard credit enhancement (that excludes excess spread of approximately 2.3% per annum) for Cl. B upgraded tranche is approximately 18% of outstanding collateral balance. Pool factor for the transaction is 27% of the outstanding collateral balance. Moody's Aaa level for the transaction is approximately 11% of the remaining collateral balance.

Moody's expects CarMax Auto Owner Trust 2008-2 transaction to incur lifetime CNL of 3.75% which is at the high end of the previous range of 3.25% to 3.75% when the security was placed on review in February. Total hard credit enhancement (that excludes excess spread of approximately 3.0% per annum) for Cl. C upgraded tranche is approximately 13% of outstanding collateral balance. Pool factor for the transaction is approximately 33% of the outstanding collateral balance. Moody's Aaa level for the transaction is approximately 12% of the remaining collateral balance.

Ratings on the affected notes could be upgraded (where applicable) if the lifetime CNLs are lower by 10%, or downgraded if the lifetime CNLs are higher by 10%.

The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. The decision to take (or not take) a rating action is dependent on an assessment of a range of factors including, but not exclusively, the performance metrics. Primary sources of assumption uncertainty are the current macroeconomic environment, in which unemployment continues to rise, and weakness in the used vehicle market. Moody's currently views the used vehicle market as stronger now than it was a year ago, when the uncertainty relating to the economy as well as the future of the U.S auto manufacturers was significantly greater. Overall, Moody's central global scenario remains "Hook-shaped" for 2010 and 2011; we expect overall a sluggish recovery in most of the world largest economies, returning to trend growth rate with elevated fiscal deficits and persistent unemployment levels.

The principal methodology used in these rating actions was "Moody's Approach to Rating U.S. Auto Loan-Backed Securities", published in June 2007 and available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating these transactions can also be found in the Rating Methodologies sub-directory on Moody's website. Further information on Moody's analysis of this transaction is available on www.moodys.com.

Moody's Investors Service did not receive or take into account a third party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past 6 months.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, public information and confidential and proprietary Moody's Investors Service information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of maintaining a credit rating.

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.

San Francisco
Eric Fellows
VP - Senior Credit Officer
Structured Finance Group
Moody's FIS Domestic Sales Office - San Francisco CA
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Alda F. Sanchez
Associate Analyst
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.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's upgrades CarMax 2007 and 2008 prime auto loan ABS
No Related Data.
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