Mercedes-Benz Auto Receivables Trust 2019-1 Notes Assigned Preliminary Ratings

Mercedes-Benz Auto Receivables Trust 2019-1's issuance is an ABS
transaction backed by prime auto loan receivables.
We assigned our preliminary ratings to the class A-1, A-2A/A-2B, A-3, and
A-4 notes.
The preliminary ratings reflect our view of the transaction's credit
support, its ability to make timely interest and principal payments, and
the underlying collateral's credit quality, among other factors.
NEW YORK (S&P Global Ratings) Sept. 12, 2019--S&P Global Ratings today
assigned its preliminary ratings to Mercedes-Benz Auto Receivables Trust 2019-1
's $1.18 billion ($1.51 billion if upsized) asset-backed notes series 2019-1
(see list).
The note issuance is an asset-backed securities transaction backed by prime
auto loan receivables.
The preliminary ratings are based on information as of Sept. 12, 2019.
Subsequent information may result in the assignment of final ratings that
differ from the preliminary ratings.
The preliminary ratings reflect:
The availability of approximately 6.4% credit support for the class A
notes based on stressed cash flow scenarios. This credit support provides
more than 5.0x coverage of our 0.55%-0.65% expected net loss range to the
class A notes.
The timely interest and full principal payments made under the stressed
cash flow modeling scenarios appropriate for the assigned preliminary
ratings. In our modeling approach, we used a bifurcated pool method, in
which the subvented loans prepay and default at lower rates than the
nonsubvented loans. For cash flow purposes, the subvented/nonsubvented
cut-off annual percentage rate (APR) is 4.0%.
Our expectation that under a moderate ('BBB') stress scenario, all else
being equal, the ratings on the class A notes are not likely to be
lowered during the transaction's life. This level of rating stability
exceeds our credit stability criteria for 'AAA' ratings, which permits a
rating transition to 'AA' over one year and to 'BBB' over three years
(see "Methodology: Credit Stability Criteria," May 3, 2010).
The credit enhancement in the form of overcollateralization, yield
supplement overcollateralization, a reserve account, and excess spread.
The credit quality of the underlying collateral, which consists of prime
auto loans that have a weighted average FICO of 773 and weighted average
seasoning of approximately 12 months.
The transaction's payment and legal structures.
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