BMW AG
Class A-2 Notes, Series 2020-1 at
Class A-3 Notes, Series 2020-1 at
The Notes are supported by a portfolio of retail closed-end lease contracts and related rights secured by new
Repayment of the Notes is being made from collections from the Portfolio of Assets, which generally include scheduled monthly lease payments (including residual value payments in the case of customer-retained vehicles), as well as proceeds from vehicle sales either at the end of the lease term or earlier in the case of prepayments and defaults. Proceeds from excess mileage and wear-and-tear charges, if any, also form part of the collections used to repay the Notes.
The Notes are being repaid in sequential order. The Class A-1 Notes have already been fully repaid and the Class A-2 Notes are currently being repaid. The ratings are based on the full repayment of the Notes by their respective Final Scheduled Payment Dates, in addition to the factors noted below.
(1) High levels of credit enhancement (CE) are available to protect all the Notes. Credit protection to the Notes is provided by a non-amortizing cash account and overcollateralization equivalent to 1.2% and 82.3%, respectively, of the balance of the Notes as ofJuly 2022 . Total CE available represents 83.5% of the balance of the Notes as ofJuly 2022 .
(2) As the initial pool balances were sold to the Trust at discounted values, there is excess spread above the cost of funds and potential monthly replacement servicer fees of approximately 5.5% (annualized), which is available to offset any collection shortfall on a monthly basis.
(3) The collateral for the Notes has been performing well. To date, cumulative losses are below DBRS Morningstar's expectations set at the time of the initial ratings, amounting to 14 basis points of the initial securitization value. The pool has benefitted from cumulative residual value gains equivalent to 11.5% of the initial securitization value.
(4) As a subsidiary ofBMW AG (BMW ; rated A (high) with a Stable trend by DBRS Morningstar),BMW Canada Inc. (the Seller; rated A (high) with a Stable trend by DBRS Morningstar) benefits from the experience and expertise ofBMW's other financial services companies worldwide to ensure sound and consistent underwriting standards and efficient servicing operations.
DBRS Morningstar monitors the performance of each transaction to identify any deviation from its expectation at issuance and to ensure the ratings remain appropriate. The review is predicated upon the timely receipt of performance information from the related providers.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929> (
Notes:
The methodology is Master Canadian Structured Finance Surveillance Methodology (
The DBRS
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrsmorningstar.com' >info@dbrsmorningstar.com.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.
For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com' >info@dbrsmorningstar.com.
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