Rating Report
Report Date:
August 27, 2009




                      Ford Credit Auto Owner Trust 2009-D
                 ...
Ford Credit Auto
Owner Trust
2009-D                    FCAOT 2009-D Transaction Structure Diagram
Report Date:
August 27, ...
d. A “priority” pay cash flow waterfall that ensures          (3) The collateral pool contains a higher percentage
Ford Cr...
First Priority Principal Payment and Second Priority Principal Payment.
                        4
Ford Credit Auto        ...
Table B: Managed Portfolio: Delinquencies, Repossessions, Bankruptcies and Net Losses
Ford Credit Auto
Owner Trust        ...
Ford Credit Auto          Historical Performance of FCAOT Program
Owner Trust               The FCAOT platform has issued ...
Ford Credit Auto
Owner Trust
2009-D

Report Date:
August 27, 2009




7 Structured Finance: Auto ABS
Ford Credit Auto           FCAOT 2009-D Collateral Portfolio
Owner Trust
2009-D
                           The receivables...
Credit Enhancement
Ford Credit Auto
Owner Trust               Credit enhancement for the notes is provided in the form of ...
Excess Spread
Ford Credit Auto          Excess spread at closing is estimated to be 7.1% (see Table D for details). Excess...
Loss timing assumptions applied in the cash flow scenarios reflect a front-loaded loss timing curve
Ford Credit Auto      ...
Legal
Ford Credit Auto
Owner Trust                DBRS expects to the Depositor to receive legal opinions at closing that ...
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Ford Credit Auto Owner Trust 2009-D

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Ford Credit Auto Owner Trust 2009-D

  1. 1. Rating Report Report Date: August 27, 2009 Ford Credit Auto Owner Trust 2009-D Rating Analysts Analyst Chris O’Connell Class Note Principal Interest Description Rating Action Balance Frequency Subordination WAL2 Final Maturity Provisional Rating +1.212.806.3253 1 New Rating – coconnell@dbrs.com Class A-1 $640,000,000 Monthly 6.87% 0.30 15-Sep-10 R-1 (high) Provisional New Rating – Analyst Class A-2 $409,000,000 Monthly 6.87% 0.99 15-Jan-12 AAA Provisional David Hartung New Rating – +1.212.806.3269 Class A-3 $805,000,000 Monthly 6.87% 1.99 15-Oct-13 AAA Provisional dhartung@dbrs.com New Rating – Class A-4 $219,800,000 Monthly 6.87% 3.20 15-Aug-14 AAA Provisional New Rating – Class B $65,500,000 Monthly 3.93% 3.83 15-Dec-14 AA Provisional New Rating – Class C $43,700,000 Monthly 1.96% 3.93 15-May-15 A Provisional New Rating – Class D $43,700,000 Monthly -- 3.93 15-Feb-16 BB(high) Provisional Total $2,226,700,000 1 2 Class A-1 notes are being offered as a 144A. Assumes 1.3% ABS pricing speed and priced to call. Pricing Date: September 2, 2009 Expected Closing Date: September 11, 2009 First Payment Date: October 15, 2009. Transaction Parties and Related Information Sponsor Ford Motor Credit Company LLC (FMCC) (Rated: ‘B(low)/R-5’—Stable trend) Issuer Ford Credit Auto Owner Trust 2009-D Depositor Ford Credit Auto Receivables Two LLC Originator FMCC Servicer FMCC Indenture Trustee The Bank of New York Mellon Owner Trustee U.S. Bank Trust National Association Collateral Description Portfolio of new and used retail car and light truck auto loans Executive Summary DBRS has assigned preliminary ratings to the Ford Credit Auto Owner Trust 2009-D as listed above. The Ford Credit Auto Owner Trust 2009-D (FCAOT 2009-D) transaction represents the 32nd public securitization of FMCC’s retail auto loans. The FCAOT 2009-D trust assets include: the receivables stemming from new and used car and light truck loans; the security interests in the financed vehicle; proceeds from any insurance claims on the vehicles or obligors; the reserve account; and rights under the transaction documents for the repurchase of ineligible receivables, and purchase of servicer impaired receivables and servicer modified receivables. Information and statistics included in this report have been obtained from the FCAOT 2009-D preliminary prospectus, SEC filings or FMCC annual reports, unless otherwise referenced. The FCAOT 2009-D transaction represents a return to a structure last used in the FCAOT 2008-C transaction. In between, the three transactions issued (FCAOT 2009-A, B and C) included only class A notes, meaning no subordination, and higher levels of overcollateralization (see Table D in the Credit Enhancement section below for a comparison of recent transaction structures). 1 Structured Finance: Auto ABS
  2. 2. Ford Credit Auto Owner Trust 2009-D FCAOT 2009-D Transaction Structure Diagram Report Date: August 27, 2009 Ford Motor Credit Company LLC (Sponsor) Ford Credit Auto Receivables Two LLC (Depositor) U.S. Bank Trust N.A. (Owner Trustee) Ford Credit Auto Owner Trust 2009-D (Issuer) Bank of NY Mellon (Indenture Trustee) Trust Credit Enhancement Public Issuance Held by Depositor • Reserve Account • Class A-2 Notes • Residual Interest • Overcollateralization • Class A-3 Notes o Targeted o/c amount • Class A-4 Notes o Yield Supplement Overcollateralization Amount • Excess Spread Yield Supplement Overcollateralization Amount (YSOA) The 2009-D transaction includes a YSOA to provide overcollateralization by boosting the yield on receivables with low annual percent rates (APRs). The YSOA for each payment date approximates the present value of the amount by which future payments on receivables with APRs below a specified rate are less than future payments would be on such receivables if their APRs were equal to the specified rate. For the FCAOT 2009-D transaction, the specified rate is 11.75%. As a result of including the YSOA, overcollateralization for the transaction reaches 10.93%. However, since the YSOA is not available to cover collateral defaults, the overcollateralization is also reported as a percentage of the adjusted pool balance (i.e. the pool balance minus the YSOA). Rating Considerations Strengths Challenges (1) The FCAOT 2009-D transaction has positive (1) The current recession continues to result in structural features, including: widespread, weak performance by U.S. a. A non-declining reserve account that is fully consumers that may affect the performance on funded at closing (equal to 1.0% of the initial the trust’s collateral pool. pool balance; (2) The parent company of FMCC, Ford Motor b. A targeted overcollateralization amount with a Company, has experienced significant stress in its financial performance over the past several target of 1.5% of the current pool balance; years. Although the company has made strides c. A Yield Supplement Overcollateralization to improve its operating results, it continues to Amount to boost the yield on the underlying face substantial pressure stemming from the receivables pool. weak state of the global economy. 2 Structured Finance: Auto ABS
  3. 3. d. A “priority” pay cash flow waterfall that ensures (3) The collateral pool contains a higher percentage Ford Credit Auto that the targeted overcollateralization level is of light trucks (71.9%), which tend to be more Owner Trust sensitive to fluctuations in gasoline process and 2009-D reached before excess spread can be released to the holder of the residual interest. thus have more volatile resale values. Report Date: (2) The collateral pool supporting the FCAOT 2009-D August 27, 2009 notes has similar characteristics to the pools supporting previous FCAOT transactions, which have displayed stable and consistent performance over time. (3) 75.9% of the collateral pool consists of loans in the top two credit underwriting tiers. (4) The collateral pool is serviced by FMCC, which is an experienced and sophisticated auto loan servicer. (5) The ability of the transaction to pass cash flow stresses at the requisite rating levels. Priority of Payments The Notes receive interest and principal sequentially from available funds collected during the collection period. Available funds include interest and principal collections on the underlying collateral, amounts paid to the trust by the depositor or FMCC to repurchase ineligible receivables or by the servicer to purchase servicer impaired receivables or receivables modified by the servicer for the preceding month and amounts withdrawn from the reserve account. The class A-1 notes include a “turbo” feature, whereby after the payment of all senior fees and expenses, typical note interest and principal equal to interest and principal collections, the class A-1 notes will receive additional principal payments in advance of any funds being released to the holder of the residual interest. After the class A-1 notes are paid in full, such excess available funds are applied to pay principal on the remaining notes sequentially in an amount sufficient to achieve the Targeted Overcollateralization Amount (see Credit Enhancement section below for the definition of Targeted Overcollateralization Amount). Table A below summarized the priority of payments for the trust. Table A: Priority of Payments: 1 Trustee fees and expenses, capped at an annual amount of $150,000 per year. 2 Servicing fee (monthly 1/12 of 1.0%). 3 Class A note interest. 4 Class A note principal equal to the First Priority Principal Payment1 5 Class B note interest. 6 Class A and B note principal equal to the Second Priority Principal Payment2 7 Class C note interest. 8 Class A, B and C note principal equal to the Third Priority Principal Payment3 9 Class D note interest. 10 To the reserve account up to the original reserve account balance. 11 Note principal, sequentially, equal to the Regular Principal Payment4. 12 Additional trustee fees and expenses. 13 To the holder of the residual interest. 1 The “First Priority Principal Payment” is an amount equal to the excess of the principal amount of the class A notes as of the end of the preceding payment date over the Adjusted Pool Balance. The “Adjusted Pool Balance” is the pool balance reduced by the yield supplement overcollateralization amount. 2 The “Second Priority Principal Payment” is an amount equal to (1) the excess of the principal amount of the class A and B notes as of the end of the preceding payment date over the Adjusted Pool Balance, minus (2) the amount of any First Priority Principal Payment. 3 The “Third Priority Principal Payment” is an amount equal to (1) the excess of the principal amount of the class A, B and C notes as of the end of the preceding payment date over the Adjusted Pool Balance, minus (2) the amount of any 3 Structured Finance: Auto ABS
  4. 4. First Priority Principal Payment and Second Priority Principal Payment. 4 Ford Credit Auto The “Regular Principal Payment” includes the class A-1 turbo feature described above and for other classes of notes is Owner Trust an amount that pays principal to the extent required to reach the Targeted Overcollateralization Amount before any 2009-D funds are distributed to the holder of the residual interest. The Regular Principal Payment is equal to: (I) the greater of (a) the principal amount of the class A-1 notes as of the end of the preceding payment date and (b) the excess of the Report Date: principal amount of the notes over an amount equal to the pool balance minus the Targeted Overcollateralization August 27, 2009 Amount, minus (II) any First, Second and Third Priority Principal Payments. If the notes are accelerated following an Event of Default (see Events of Default section below), accrued interest will be paid on the class A Notes pro rata and principal on the class A Notes sequentially, followed by the payment of interest and principal on the class B, C, and D Notes only after all senior ranking notes are paid in full. The trust contains a clean-up call whereby the servicer will have the option to purchase all of the remaining receivables when the outstanding balance is equal or less than 5% of the initial pool balance. Collateral Overview and Analysis DBRS relied upon the historical performance displayed by FMCC’s managed portfolio and static pool analysis of previous FMCC-sponsored public securitizations to derive cash flow stress assumptions (see Expected Loss, Prepayment and Loss Timing Assumptions section below for details on the assumptions and stresses). The general characteristics and performance of the managed portfolio is summarized in Table B below. The graphs representing the performance of the managed portfolio and public FCAOT securitizations are found in the following charts below. Overview of Managed Portfolio Performance DBRS reviewed the performance of FMCC’s managed portfolio of active retail auto contracts on a static pool basis from January 2002 to March 2009. The data was stratified by “new” versus “used”, by “car” versus “light truck”, and further by “subvented” versus “non-subvented” loans. The analysis of cumulative net losses yielded the following observations: • Generally, used vehicle originations performed better than new across all credit tiers. • Subvented loans performed better than non-subvented loans regardless of vehicle type (i.e. car versus truck) • The performance of the FCAOT securitization trusts is consistent with the performance of FMCC’s managed portfolio. 4 Structured Finance: Auto ABS
  5. 5. Table B: Managed Portfolio: Delinquencies, Repossessions, Bankruptcies and Net Losses Ford Credit Auto Owner Trust For the six months For the year ended December 31, ended June 30, 2009-D 2009 2008 2008 2007 2006 2005 2004 Average number of contracts Report Date: 2,936,806 3,322,079 3,240,749 3,668,642 4,181,422 4,797,580 5,577,140 outstanding August 27, 2009 Average Portfolio Outstanding $42,547 $50,230 $48,842 $55,238 $58,134 64,969 73,636 (in millions) Delinquencies Average number of delinquencies 31 to 60 days 64,015 70,327 69,537 74,783 81,924 91,048 117,070 61 to 90 days 7,120 7,048 7,413 6,976 6,385 7,246 10,411 Over 90 days 1,555 1,184 1,305 1,091 991 1,135 1,752 Average number of delinquencies as a percentage of average number of contracts outstanding 31 to 60 days 2.18% 2.12% 2.15% 2.03% 1.96% 1.90% 2.10% 61 to 90 days 0.24% 0.21% 0.23% 0.19% 0.15% 0.15% 0.19% Over 90 days 0.05% 0.04% 0.04% 0.03% 0.02% 0.02% 0.03% Repossessions and Credit Losses 6ME 6ME 6/30/09 6/30/08 YE 2008 YE 2007 YE 2006 YE 2005 YE 2004 Repossessions as a percentage of average number of 2.97% 2.16% 2.39% 1.95% 2.01% 2.39% 3.09% contracts outstanding Aggregate net losses (in $333 $292 $709 $435 $398 $585 $1,080 millions) Net losses as a percentage of 1.57% 1.16% 1.45% 0.79% 0.68% 0.90% 1.47% average portfolio outstanding Net losses as a percentage of 3.09% 2.34% 2.96% 1.56% 1.27% 1.59% 2.60% gross liquidations Number of contracts charged 57,377 51,311 109,385 111,732 129,898 165,074 236,894 off Number of contracts charged off as a percentage of average 3.91% 3.09% 3.38% 3.03% 3.11% 3.44% 4.25% number of contracts outstanding Average net loss on contracts $5,808 $5,692 $6,483 $3,892 $3,062 $3,544 $4,557 charged off 5 Structured Finance: Auto ABS
  6. 6. Ford Credit Auto Historical Performance of FCAOT Program Owner Trust The FCAOT platform has issued 31 public securitizations from 2000 through 2008. The performance on 2009-D the transactions has been stable and consistent. The following charts track the Cumulative Net Loss for Report Date: each transaction. August 27, 2009 6 Structured Finance: Auto ABS
  7. 7. Ford Credit Auto Owner Trust 2009-D Report Date: August 27, 2009 7 Structured Finance: Auto ABS
  8. 8. Ford Credit Auto FCAOT 2009-D Collateral Portfolio Owner Trust 2009-D The receivables in the FCAOT 2009-D collateral pool were randomly selected by FMCC from its Report Date: portfolio of retail installment sale contracts that meet certain selection criteria. The selection criteria August 27, 2009 include that, as of the cutoff date, each receivable: • is a simple interest receivable with level monthly payments and an original term of not greater than 72 months, • is not more than 30 days delinquent (FMCC considers a receivable delinquent if more than $49.99 of a scheduled payment is overdue), • has not been extended or rewritten, and • is not subject to a bankruptcy proceeding. Table C: Collateral Summary and Comparison FCAOT FCAOT FCAOT FCAOT FCAOT FCAOT FCAOT 2009-D 2009-C 2009-B 2009-A 2008-C 2008-B 2008-A Number of Receivables 132,807 67,817 114,709 179,524 338,143 94,331 140,730 Initial Pool Balance ($ bil) 2.500 1.231 2.309 3.483 6,254 1.720 2.400 Avg. principal balance ($) 18,824 18,164 20.124 19,402 18,495 18,445 17,053 WA APR (%) 5.11 5.28 5.81 7.00 4.93 4.84 4.51 WA Original Term (mos.) 61.4 62.6 62.3 61.4 61.5 61.3 61.3 WA Remaining Term (mos.) 52.8 57.4 57.4 56.4 52.8 52.1 49.4 Seasoning (mos.) 8.6 5.2 4.9 5.0 8.7 9.2 11.9 % of loans >60 mos. 39.42 44.34 42.95 40.56 35.68 35.26 34.83 % New vehicles 84.06 84.83 79.38 74.69 84.14 84.61 86.15 % Used vehicles 15.94 15.17 20.62 25.31 15.86 15.39 13.85 % Cars 28.10 26.77 30.84 27.09 25.54 24.51 24.44 % Light Trucks 71.90 73.23 69.16 72.91 74.46 75.49 75.56 WA FICO (all) 720 716 709 706 707 707 711 WA FICO (>60 mos.) 702 707 698 692 686 685 689 Top 5 Distribution by Model (%) 1 F-150=22.18 F-150=20.92 F-150=18.73 F-150=18.17 n.a. n.a. n.a. 2 Escape=9.86 Escape=11.32 Escape=8.39 Edge=6.93 n.a. n.a. n.a. 3 Edge=7.65 Edge=9.01 Fusion=8.20 Escape=6.66 n.a. n.a. n.a. 4 Focus=6.44 Fusion =7.64 Edge=7.30 F-250=5.99 n.a. n.a. n.a. 5 Fusion=5.75 Mustang=5.20 Focus=6.24 Focus=5.94 n.a. n.a. n.a. Top 5 Distribution by State (%) 1 TX=16.63 TX=13.80 CA=10.74 CA=10.24 TX=12.74 TX=12.76 CA=12.53 2 CA=8.14 CA=8.58 TX=9.70 TX=9.70 CA=10.91 CA=11.35 TX=10.52 3 FL=5.88 MI=6.44 FL=6.85 FL=7.73 FL=8.01 FL=7.99 FL=7.99 4 MI=5.63 FL=6.11 MI=6.22 MI=5.68 IL=4.22 IL=4.20 NY=4.66 5 NY=4.46 NY=4.39 IL=4.55 NY=4.62 NY=4.01 NY=4.06 IL=4.09 8 Structured Finance: Auto ABS
  9. 9. Credit Enhancement Ford Credit Auto Owner Trust Credit enhancement for the notes is provided in the form of subordination, a reserve account, 2009-D overcollateralization and excess spread. After applying DBRS stress scenarios relative to the respective rating categories, DBRS has determined that the total credit enhancement available on the Notes is Report Date: August 27, 2009 adequate to cover expected losses at each class’ respective rating category. The components of credit enhancement for the 2009-D Notes and other recent FCAOT transactions are summarized in Table D below. Table D: Credit Enhancement Summary and Comparison FCAOT FCAOT FCAOT FCAOT FCAOT FCAOT FCAOT 2009-D 2009-C 2009-B 2009-A 2008-C 2008-B 2008-A Subordination Class A 7.0% -- -- -- 7.0% 7.0% 7.0% Class B 4.0% -- -- -- 4.0% 4.0% 4.0% Class C 2.0% -- -- -- 2.0% 2.0% 2.0% Class D -- -- -- -- -- -- -- Reserve Account Initial (non-declining) 1.0% 1.0% 1.0% 1.2% 0.5% 0.5% 0.5% Overcollateralization Initial (as % of IPB) 10.9% 17.2% 16.2% 15.2% 7.9% 7.6% 6.9% Initial (as % of APB) (2.0%) 5.0% 5.0% 5.0% (2.0%) (2.0%) (2.0%) Target 1.0% 7.0% 7.0% 7.0% 1.0% 1.0% 1.0% Min. Total “Hard” Credit Enhancement (as % of APB) Class A 5.5% 6.0% 6.0% 6.2% 5.5% 5.5% 5.5% Class B 2.5% -- -- -- 2.5% 2.5% 2.5% Class C .5% -- -- -- .5% .5% .5% Class D (1.0%) -- -- -- (1.5%) (1.5%) (1.5%) Annual Excess Spread Collateral WA APR 5.1% 5.3% 5.8% 5.8% 4.9% 4.8% 4.5% Discounted WA APR 11.8% 11.4% 11.5% 11.5% 10.1% 9.8% 9.3% less WA Coupon 3.7% 3.4% 3.2% 3.2% 4.9% 4.6% 4.4% less Servicing Fee 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Total Annual X/S 7.1% 7.3% 7.3% 7.3% 4.2% 4.2% 3.9% Reserve Account At closing, the Reserve Account will be fully funded in an amount equal to $24,999,985, or 1.00% of the initial pool balance (including the YSOA). The Reserve Account is non-declining and, therefore, may provide increasing credit support as the Notes amortize, provided losses are covered by excess spread. Overcollateralization The initial pool balance (including the YSOA) will exceed the aggregate principal amount of issued Notes by $273,298,528, or 10.93%. On an adjusted pool balance basis (excluding the YSOA), the aggregate principal amount of issued Notes exceeds the adjusted pool balance by $43,748, 684, or 2.0%, meaning that at issuance the trust is undercollateralized by (2.0%). The transaction structure includes a targeted overcollateralization amount equal to the sum of the YSOA plus the excess, if any, of (a) 1.50% of the current pool balance over (b) 1.00% of the initial pool balance (which is also the size of the reserve account). The targeted overcollateralization amount will, therefore, adjust each month depending on the decrease in the collateral pool (due to principal collections plus chargeoffs on defaulted receivables) and the decline of the YSOA. When the pool amortizes to the point at which 1.50% of the current pool balance is equal to or less than 1.00% of the initial pool balance, the targeted overcollateralization amount will equal solely the amount of the YSOA. Because of the floor amount built into the targeted overcollateralization amount calculation, once the target is reached, the overall level of credit enhancement for the outstanding notes will increase as the transaction amortizes, provided losses are covered by excess spread and the reserve account. 9 Structured Finance: Auto ABS
  10. 10. Excess Spread Ford Credit Auto Excess spread at closing is estimated to be 7.1% (see Table D for details). Excess spread is derived from Owner Trust the yield on the underlying retail loan collateral plus the YSOA, less the trusts cost of funds, servicing 2009-D fee, and losses. Excess spread will be used in addition to collections on the collateral portfolio to pay Report Date: down Notes to the extent required to achieve the targeted overcollateralization amount. August 27, 2009 Expected Loss, Prepayment and Loss Timing Assumptions Base Case Loss Assumptions An analysis was conducted on the performance of FMCC’s managed portfolio of active retail auto contracts on a static pool basis from January 2002 to March 2009. The data was stratified by “new” versus “used”, by “car” versus “light truck”, and further by “subvented” versus “non-subvented” loans (see table below). A base case cumulative loss assumption of 3.2% was derived from an analysis of how each sub-segment within the managed portfolio performed. To arrive at the CNL, the highest CNL performance observed for any time frame for each sub-segment (e.g. “used, car, non-subvened, tier 2”) was used to derive the most conservative aggregate base case for that sub-segment on a weighted average basis for the FCAOT 2009-D pool. The base case CNL assumption does not reflect the seasoning of the pool. Cash Flow Modeling: The FCAOT 2009-D transaction was modeled for AAA, AA, A, and BB rating categories. The multiples applied to the CNL at each rating category fell within the standard ranges, described below: Rating Category Multiple to CNL AAA 4 – 6x AA 3 – 4x A 2 – 3x BB 1.2 – 1.5x Prepayments were applied according to the following curves: 10 Structured Finance: Auto ABS
  11. 11. Loss timing assumptions applied in the cash flow scenarios reflect a front-loaded loss timing curve Ford Credit Auto derived from a study of historical loss performance of more than 500 auto loan ABS transactions (for Owner Trust more details see the Loss Timing Curve section of DBRS Rating Criteria – U.S Auto Asset-Backed 2009-D Securities: Net Interest Margins (NIMs), December 2005). The loss curve applied in the cash flow Report Date: scenarios spans four years with losses occurring at the following rate: 40% in year one, 30% in year two, August 27, 2009 20% in year three and 10% in year four. Receivable Origination and Servicing FMCC is the originator and servicer of the receivables. DBRS conducted a review of the origination and servicing operations of FMCC, including interviews with and presentations from senior management and an on-site review of the Nashville, TN Business Center. Among the areas covered were: financial performance, business strategy, funding status and strategy, credit loss performance, originations strategy and operations, residual value setting strategy, receivable loan servicing strategy and operations, and training and development. DBRS currently maintains a rating on FMCC of ‘B(low)/R-5’—Stable trend. The most recent ratings discussion on the company can be found at www.dbrs.com. Table E: Originations Characteristics Six Months Ended June 30, Year Ended December 31, 2009 2008 2008 2007 2006 2005 2004 Number of receivables originated 251,342 393,797 754,633 845,660 1,200,165 1,181,917 1,525,237 Aggregate original principal balance (in $5,832 $9,183 $17,138 $21,670 $29,647 $25,949 $34,136 millions) WA original term (in mos.) 61.7 61.4 61.8 60.8 62.8 58.5 59.0 WA FICO score at origination 714 706 710 706 703 711 703 The Depositor is responsible for repurchasing ineligible receivables which have a material adverse effect on the trust and for which it has not cured the cause of the ineligibility. Similarly, the Servicer is responsible for repurchasing receivables which it has impaired and has not cured the impairment, as well as receivables it has modified in certain ways, including: (1) granting payment extensions that extend the final payment date of the receivable beyond six months past the last scheduled payment date of any receivable in the securitized pool and (2) if it modifies the amount financed or the annual percentage rate of the receivable or rewrites or reschedules the contract to increase the number of originally scheduled due dates of the receivable. Events of Default Notable events of default under the indenture include: (1) Failure to pay interest due on the controlling class notes. (2) Failure to pay principal on the scheduled final maturity date for any class of notes. (3) Breach of covenants or representations by the issuer not cured within 60 days. (4) Bankruptcy or dissolution of the trust. 11 Structured Finance: Auto ABS
  12. 12. Legal Ford Credit Auto Owner Trust DBRS expects to the Depositor to receive legal opinions at closing that indicate that (1) the registration 2009-D of the vehicle financing statements (and where applicable various forms of retail installment contracts) in certain high concentration jurisdictions (i.e., California) are valid and enforceable, (2) the transaction Report Date: August 27, 2009 documents are valid and enforceable, (3) the sale of the receivables from the Sponsor to the Depositor will be properly characterized as a true sale if the Sponsor were to become a debtor in a case for relief under the Bankruptcy Code, and (4) the security interest created in favor of the Indenture Trustee over the trust assets is valid and enforceable. Note: All figures are in U.S. dollars unless otherwise noted. This report is based on information as of August 21, 2009. Subsequent information may result in material changes to the rating assigned herein and/or the contents of this report. Copyright © 2009, DBRS Limited and DBRS, Inc. (collectively, DBRS). All rights reserved. The information upon which DBRS ratings and reports are based is obtained by DBRS from sources believed by DBRS to be accurate and reliable. DBRS does not perform any audit and does not independently verify the accuracy of the information provided to it. DBRS ratings, reports and any other information provided by DBRS are provided “as is” and without representation or warranty of any kind. DBRS hereby disclaims any representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability, fitness for any particular purpose or non-infringement of any of such information. In no event shall DBRS or its directors, officers, employees, independent contractors, agents and representatives (collectively, DBRS Representatives) be liable (1) for any inaccuracy, delay, loss of data, interruption in service, error or omission or for any damages resulting therefrom, or (2) for any direct, indirect, incidental, special, compensatory or consequential damages with respect to any error (negligent or otherwise) or other circumstance or contingency within or outside the control of DBRS or any DBRS Representative, in connection with or related to obtaining, collecting, compiling, analyzing, interpreting, communicating, publishing or delivering any such information. Ratings and other opinions issued by DBRS are, and must be construed solely as, statements of opinion and not statements of fact as to credit worthiness or recommendations to purchase, sell or hold any securities. DBRS receives compensation from issuers, insurers, guarantors and/or underwriters of debt securities for assigning ratings. This publication may not be reproduced, retransmitted or distributed in any form without the prior written consent of DBRS. 12 Structured Finance: Auto ABS

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