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Rating Action:

Moody's upgrades CarMax 2012-2 prime auto loan ABS and reviews 2011-3 for upgrade

15 Aug 2013

Approximately $1.6 billion of asset-backed securities affected

New York, August 15, 2013 -- Moody's Investors Service has upgraded three subordinate tranches from 2012-2 transaction, placed on review for upgrade two subordinate tranches from 2011-3 transaction and affirmed 21 tranches from 2010, 2011 and 2012 transactions. The transactions are sponsored by CarMax Business Services LLC (CarMax).

RATINGS

Issuer: CarMax Auto Owner Trust 2010-3

Cl. A-3, Affirmed Aaa (sf); previously on Mar 25, 2013 Affirmed Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Mar 25, 2013 Affirmed Aaa (sf)

Cl. B, Affirmed Aaa (sf); previously on Mar 25, 2013 Affirmed Aaa (sf)

Cl. C, Affirmed Aaa (sf); previously on May 29, 2013 Upgraded to Aaa (sf)

Cl. D, Affirmed Aa2 (sf); previously on May 29, 2013 Upgraded to Aa2 (sf)

Issuer: CarMax Auto Owner Trust 2011-1

Cl. A-3, Affirmed Aaa (sf); previously on Mar 25, 2013 Affirmed Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Mar 25, 2013 Affirmed Aaa (sf)

Cl. B, Affirmed Aaa (sf); previously on Mar 25, 2013 Affirmed Aaa (sf)

Cl. C, Affirmed Aaa (sf); previously on May 29, 2013 Upgraded to Aaa (sf)

Cl. D, Affirmed Aa2 (sf); previously on May 29, 2013 Upgraded to Aa2 (sf)

Issuer: CarMax Auto Owner Trust 2011-2

Cl. A-3, Affirmed Aaa (sf); previously on Sep 23, 2011 Definitive Rating Assigned Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Sep 23, 2011 Definitive Rating Assigned Aaa (sf)

Cl. B, Affirmed Aaa (sf); previously on Aug 16, 2012 Upgraded to Aaa (sf)

Cl. C, Affirmed Aa3 (sf); previously on Aug 16, 2012 Upgraded to Aa3 (sf)

Cl. D, Affirmed A1 (sf); previously on Aug 16, 2012 Upgraded to A1 (sf)

Issuer: CarMax Auto Owner Trust 2011-3

Cl. A-3, Affirmed Aaa (sf); previously on Nov 11, 2011 Definitive Rating Assigned Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Nov 11, 2011 Definitive Rating Assigned Aaa (sf)

Cl. B, Affirmed Aaa (sf); previously on Nov 7, 2012 Upgraded to Aaa (sf)

Cl. C, Aa1 (sf) Placed Under Review for Possible Upgrade; previously on Nov 7, 2012 Upgraded to Aa1 (sf)

Cl. D, Aa3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 7, 2012 Upgraded to Aa3 (sf)

Issuer: CarMax Auto Owner Trust 2012-2

Cl. A-2, Affirmed Aaa (sf); previously on Jun 15, 2012 Definitive Rating Assigned Aaa (sf)

Cl. A-3, Affirmed Aaa (sf); previously on Jun 15, 2012 Definitive Rating Assigned Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Jun 15, 2012 Definitive Rating Assigned Aaa (sf)

Cl. B, Upgraded to Aaa (sf); previously on May 29, 2013 Aa2 (sf) Placed Under Review for Possible Upgrade

Cl. C, Upgraded to Aa1 (sf); previously on May 29, 2013 A1 (sf) Placed Under Review for Possible Upgrade

Cl. D, Upgraded to A1 (sf); previously on May 29, 2013 Baa1 (sf) Placed Under Review for Possible Upgrade

RATINGS RATIONALE

The actions are 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. The cumulative net loss expectations since the prior review remain unchanged for all outstanding pools. The transactions have performance triggers that allow the target and floor amounts of overcollateralization (OC) to decrease in months 30 and 36 should the cumulative net loss for the pools be below 2.00% or 2.35% respectively. The OC target (as a percentage of the remaining pool balance) steps down to 1.25% and 1.00% from the current level of 1.50% in the 2010-3 transaction, to 1.15% and 0.90% from the current level of 1.40% in the 2011-1 transaction, and to 0.75% and 0.50% from the current level of 1.00% in the 2011-2 should the triggers pass, as we anticipate. The OC floor (as a percentage of the original pool balance) steps down to 0.40% and 0.25% from 0.50% in all three transactions should the triggers pass as we expect. There are no performance triggers associated with 2011-3, 2012-2 and 2012-3 transactions. However, the OC grows from 0% to a target of 1.00% of the current pool balance with a floor of 0.50% of the initial pool balance for the 2011-3 and 2012-2 transactions, and from 0% to 0.50% of the current pool balance for 2012-3 transaction. Based on our current expected losses , we anticipate that 2010 and 2011 transactions will meet their performance criteria allowing the target amounts of OC, as well as the floor percentage of OC, to step down. Our rating actions take the step down levels of enhancement into account.

Below are key performance metrics (as of July 2013 distribution date)and credit assumptions for the affected transactions. Credit assumptions include Moody's expected lifetime cumulative net loss expectation (CNL) which is expressed as a percentage of the original pool balance; Moody's lifetime remaining CNL expectation and Moody's Aaa (sf) level which are expressed as a percentage of the current pool balance. The Aaa level is the level of credit enhancement that would be consistent with a Aaa (sf) rating for the given asset pool. Performance metrics include pool factor, which is the ratio of the current collateral balance and the original collateral balance at closing; total credit enhancement (expressed as a percentage of the outstanding collateral pool balance) which typically consists of subordination, overcollateralization, and reserve fund.

Issuer: CarMax Auto Owner Trust 2010-3

Lifetime CNL expectation -- 1.50%, prior expectation (May 2013) was 1.50%

Lifetime Remaining CNL expectation -- 1.40%

Aaa level -- 7.00%

Pool Factor -- 27.60%

Total Hard credit enhancement -- Cl. A 25.91%, Cl. B 16.49%, Cl. C 6.88%, Cl. D 2.36%

Excess Spread per annum - Approximately 6.5%

Issuer: CarMax Auto Owner Trust 2011-1

Lifetime CNL expectation --1.50%, prior expectation (May 2013) was 1.50%

Lifetime Remaining CNL expectation -- 1.25%

Aaa level -- 7.00%

Pool Factor -- 35.42%

Total Hard credit enhancement - Cl. A 19.47%, Cl. B 12.56%, Cl. C 5.66%, Cl. D 2.12%

Excess Spread per annum - Approximately 5.8%

Issuer: CarMax Auto Owner Trust 2011-2

Lifetime CNL expectation --1.60%, prior expectation (Aug 2012) was 1.60%

Lifetime Remaining CNL expectation -- 1.36%

Aaa level -- 8.00%

Pool Factor --45.54%

Total Hard credit enhancement - Cl. A 13.4%, Cl. B 9.33%, Cl. C 4.28%, Cl. D 1.65%

Excess Spread per annum - Approximately 6.7%

Issuer: CarMax Auto Owner Trust 2011-3

Lifetime CNL expectation --1.70%, prior expectation (Nov 2012) was 1.70%

Lifetime Remaining CNL expectation -- 1.59%

Aaa level -- 8.00%

Pool Factor -- 48.94%

Total Hard credit enhancement - Cl. A 12.98%, Cl. B 8.68%, Cl. C 5.01%, Cl. D 1.53%

Excess Spread per annum - Approximately 6.4%

Issuer: CarMax Auto Owner Trust 2012-2

Lifetime CNL expectation -- 2.25%, prior expected range (May 2013) was 2.00% - 2.25%

Lifetime Remaining CNL expectation -- 2.35%

Aaa level -- 10.00%

Pool Factor -- 65.28%

Total Hard credit enhancement - Cl. A 9.96%, Cl. B 6.74%, Cl. C 3.99%, Cl. D 1.38%

Excess Spread per annum - Approximately 7.2%

Ratings on the affected securities may be downgraded if the lifetime CNLs are higher by 20%.

The principal methodology used in these ratings was "Moody's Approach to Rating Auto Loan Backed ABS " published in May 2013. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

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 remain at elevated levels, and strength in the used vehicle market. Moody's currently views the used vehicle market as much stronger now than it was at the end of 2008 when the uncertainty relating to the economy as well as the future of the U.S auto manufacturers was significantly greater. Overall, Moody's expects overall a sluggish recovery in most of the world's largest economies, returning to trend growth rate with elevated fiscal deficits and persistent unemployment levels.

REGULATORY DISCLOSURE

Moody's received and took into account one or more third-party assessments on the due diligence performed regarding the underlying assets or financial instruments in these transactions and the assessments had a neutral impact on the credit ratings.

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Yashasvini N Kasetty
Associate Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Eric Fellows
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's upgrades CarMax 2012-2 prime auto loan ABS and reviews 2011-3 for upgrade
No Related Data.
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