UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM 10-K |
Ford Credit Auto Owner Trust 2017-C (Exact name of issuing entity as specified in its charter) Commission File Number: 333-205966-07 Central Index Key Number: 0001721372 |
Ford Credit Auto Receivables Two LLC (Exact name of depositor as specified in its charter) Commission File Number: 333-205966 Central Index Key Number: 0001129987 |
Ford Motor Credit Company LLC (Exact name of sponsor as specified in its charter) Central Index Key Number: 0000038009 |
Delaware (State or Other Jurisdiction of Incorporation of issuing entity) | 81-6900530 (I.R.S. Employer Identification No. of issuing entity) |
c/o U.S. Bank Trust National Association 300 Delaware Ave., 9th Floor Wilmington, Delaware (Address of Principal Executive Offices of issuing entity) | 19801 (Zip Code) |
Large Accelerated Filer ¨ Non-Accelerated Filer x (Do not check if a smaller reporting company) | Accelerated Filer ¨ Smaller reporting company ¨ Emerging growth company ¨ |
Item 1. Item 1A. Item 2. Item 3. | Business Risk Factors Properties Legal Proceedings |
Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures |
Item 10. Item 11. Item 12. Item 13. Item 14. | Directors, Executive Officers and Corporate Governance. Executive Compensation. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Certain Relationships and Related Transactions, and Director Independence. Principal Accountant Fees and Services. |
Exhibit Number | Description | |
Amended Certificate of Formation of Ford Credit Auto Receivables Two LLC (“FCAR Two”) (included in Exhibit 3.1 to the Registration Statement No. 333-205966, as filed with the Securities and Exchange Commission (the “Commission”) on September 4, 2015, which is incorporated herein by reference). | ||
Second Amended and Restated Limited Liability Company Agreement of FCAR Two (included in Exhibit 3.2 to the Registration Statement No. 333-205966, as filed with the Commission on September 4, 2015, which is incorporated herein by reference). | ||
Indenture, dated as of November 1, 2017, between the Trust and BNYM, as indenture trustee (included in Exhibit 4.1 to the Trust’s Form 8-K under Commission File No. 333-205966-07, as filed with the Commission on November 22, 2017, which is incorporated herein by reference). | ||
Amended and Restated Trust Agreement, dated as of November 1, 2017, between FCAR Two and U.S. Bank Trust National Association, as owner trustee (included in Exhibit 10.1 to the Trust’s Form 8-K under Commission File No. 333-205966-07, as filed with the Commission on November 22, 2017, which is incorporated herein by reference). | ||
Receivables Purchase Agreement, dated as of November 1, 2017, between Ford Credit and FCAR Two (included in Exhibit 10.2 to the Trust’s Form 8-K under Commission File No. 333-205966-07, as filed with the Commission on November 22, 2017, which is incorporated herein by reference). | ||
Sale and Servicing Agreement, dated as of November 1, 2017, among Ford Credit, as Servicer, FCAR Two and the Trust (included in Exhibit 10.3 to the Trust’s Form 8-K under Commission File No. 333-205966-07, as filed with the Commission on November 22, 2017, which is incorporated herein by reference). | ||
Administration Agreement, dated as of November 1, 2017, between Ford Credit and the Trust (included in Exhibit 10.4 to the Trust’s Form 8-K under Commission File No. 333-205966-07, as filed with the Commission on November 22, 2017, which is incorporated herein by reference). | ||
Account Control Agreement, dated as of November 1, 2017, between BNYM and the Trust (included in Exhibit 10.5 to the Trust’s Form 8-K under Commission File No. 333-205966-07, as filed with the Commission on November 22, 2017, which is incorporated herein by reference). | ||
Asset Representations Review Agreement, dated as of November 1, 2017, between Ford Credit, as Servicer, the Trust and Clayton Fixed Income Services LLC, as Asset Representations Reviewer (included in Exhibit 10.6 to the Trust’s Form 8-K under Commission File No. 333-205966-07, as filed with the Commission on November 22, 2017, which is incorporated herein by reference). | ||
Certification of Ford Credit pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Report on Assessment of Compliance with Servicing Criteria for Ford Credit. | ||
Report on Assessment of Compliance with Servicing Criteria for BNYM. | ||
Attestation Report of PricewaterhouseCoopers LLP on Assessment of Compliance with Servicing Criteria relating to Ford Credit. | ||
Attestation Report of KPMG LLP on Assessment of Compliance with Servicing Criteria relating to BNYM. | ||
Servicer Compliance Statement of Ford Credit. |
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT. |
Ford Credit Auto Owner Trust A 2017-C (Issuing entity) |
By: Ford Motor Credit Company LLC (Servicer) |
By: /s/ Jason C. Behnke Jason C. Behnke Vice President and Assistant Treasurer (senior officer of Servicer in charge of servicing function) |
1. | I have reviewed this report on Form 10-K and all reports on Form 10-D required to be filed in respect of the period covered by this report on Form 10-K of Ford Credit Auto Owner Trust 2017-C (the “Exchange Act periodic reports”); |
2. | Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, all of the distribution, servicing and other information required to be provided under Form 10-D for the period covered by this report is included in the Exchange Act periodic reports; |
4. | I am responsible for reviewing the activities performed by the servicer and based on my knowledge and the compliance review conducted in preparing the servicer compliance statement required in this report under Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic reports, the servicer has fulfilled its obligations under the servicing agreement in all material respects; and |
5. | All of the reports on assessment of compliance with servicing criteria for asset-backed securities and their related attestation reports on assessment of compliance with servicing criteria for asset-backed securities required to be included in this report in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this report, except as otherwise disclosed in this report. Any material instances of noncompliance described in such reports have been disclosed in this report on Form 10-K. |
/s/ Jason C. Behnke |
Jason C. Behnke Vice President and Assistant Treasurer Ford Motor Credit Company LLC, as Servicer (senior officer in charge of servicing function) |
1. | Ford Motor Credit Company LLC (“Ford Credit”) is responsible for assessing compliance with the servicing criteria applicable to it under paragraph (d) of Item 1122 of Regulation AB, as of and for the year ended December 31, 2018 (the “Reporting Period”), including all servicing criteria except for inapplicable servicing criteria identified in paragraph 4 below and the portions of servicing criteria covered by a separate assessment and identified in Appendix A to this report. The transactions covered by this report include asset-backed securities transactions involving automotive retail installment sale contracts completed on or after January 1, 2006 and registered with the Securities Exchange Commission for which Ford Credit acted as servicer (the “Platform”). |
2. | Ford Credit has engaged vendors that are not servicers as defined in Item 1101(j) of Regulation AB to perform specific, limited or scripted activities with respect to the servicing criteria applicable to such vendors’ activities as set forth in Appendix A to this report. Ford Credit has elected to take responsibility for assessing compliance with the servicing criteria or portion of the servicing criteria applicable to each vendor. Ford Credit has policies and procedures in place to provide reasonable assurance that the vendors’ activities comply in all material respects with the servicing criteria or portion of the servicing criteria applicable to each vendor. |
3. | Except as set forth in paragraph 4 below, Ford Credit used the criteria set forth in paragraph (d) of Item 1122 of Regulation AB to assess the compliance with the applicable servicing criteria. |
4. | The servicing criteria in Item 1122(d)(1)(iii), 1122(d)(1)(iv), 1122(d)(2)(iii), 1122(d)(2)(vi), 1122(d)(3)(i)(D), 1122(d)(3)(iii), and 1122(d)(4)(ix) through 1122(d)(4)(xiii) are inapplicable to Ford Credit based on the activities it performs, directly or through its vendors (including indenture trustees), with respect to the Platform. |
5. | Ford Credit has complied, in all material respects, with the applicable servicing criteria as of December 31, 2018 and for the Reporting Period with respect to the Platform taken as a whole. |
6. | Ford Credit has not identified and is not aware of any material instance of noncompliance by the vendors with the applicable servicing criteria as of December 31, 2018 and for the Reporting Period with respect to the Platform taken as a whole. |
7. | Ford Credit has not identified any material deficiency in its policies and procedures to monitor the compliance by the vendors with the applicable servicing criteria as of December 31, 2018 and for the Reporting Period with respect to the Platform taken as a whole. |
8. | PricewaterhouseCoopers LLP, an independent registered public accounting firm, has issued an attestation report on Ford Credit’s assessment of compliance with the applicable servicing criteria for the Reporting Period. |
March 21, 2019 | Ford Motor Credit Company LLC |
By: | /s/ Jason C. Behnke | |
Jason C. Behnke | ||
Vice President and Assistant Treasurer |
Reference | Criteria | Performed Directly by Ford Credit | Performed by Vendor(s) for which Ford Credit is the Responsible Party | Performed by Indenture Trustee |
1122(d)(2)(i) | Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements | Paying to indenture trustee | Depositing to custodial bank accounts | |
1122(d)(2)(ii) | Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel | Paying to indenture trustee | Disbursing to investors | |
1122(d)(2)(iv) | The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements | Providing indenture trustee instructions for opening accounts for the transaction | Establishing and maintaining accounts for the transaction | |
1122(d)(3)(ii) | Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements | Providing indenture trustee instructions for making investor distributions | Remitting to investors | |
1122(d)(3)(iv) | Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements | Preparing investor reports | Reconciling remittances to investors | |
1122(d)(4)(i) | Collateral or security on pool assets is maintained as required by the transaction agreements or related pool assets | Maintaining security on financed vehicles | Perform on site inventory audits of financed vehicles and related title documents | |
1122(d)(4)(ii) | Pool assets and related documents are safeguarded as required by the transaction agreements | Safeguarding of documents relating to, evidencing and/or securing a receivable | Perform on site inventory audits of financed vehicles and related title documents | |
1122(d)(4)(iv) | Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the applicable servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents | Posting all payments on pool assets to Ford Credit’s obligor records within two business days after receipt | Transferring of obligor payments received at lockbox to Ford Credit |
1122(d)(4)(vi) | Changes with respect to the terms or status of an obligor’s pool asset (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents | Making most extensions, due date changes and related changes to obligor’s pool asset | Handling some extensions and due date changes | |
1122(d)(4)(vii) | Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu or foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements | Approving and processing all customer requests for re-writes and transfers of equity to obligor’s pool asset | Researching customer eligibility for some re-writes and transfers of equity on certain categories of obligor’s pool asset | |
1122(d)(4)(viii) | Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment) | Performing collection efforts on most delinquent pool assets | Performing some early stage collection efforts on certain categories of delinquent pool assets |
The Bank of New York Mellon | BNY Mellon Trust of Delaware | |
/s/ Alphonse Briand Jr. | /s/ Robert L. Griffin | |
Alphonse Briand Jr. Authorized Signatory | Robert L. Griffin Authorized Signatory | |
The Bank of New York Mellon Trust Company, N.A. | ||
/s/ Antonio I. Portuondo | ||
Antonio I. Portuondo Authorized Signatory | ||
Dated: February 28, 2019 |
APPLICABLE TO PLATFORM | ||||
REG AB REFERENCE | SERVICING CRITERIA | Performed Directly by the Company | Performed by Vendor(s) for which the Company is the Responsible Party | NOT APPLICABLE TO PLATFORM |
General servicing considerations | ||||
1122(d)(1)(i) | Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. | X | ||
1122(d)(1)(ii) | If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities. | X | ||
1122(d)(1)(iii) | Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained. | X | ||
1122(d)(1)(iv) | A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. | X | ||
1122(d)(1)(v) | Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information. | X | ||
Cash collection and administration | ||||
1122(d)(2)(i) | Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements. | X | ||
1122(d)(2)(ii) | Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. | X | ||
1122(d)(2)(iii) | Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. | X | ||
1122(d)(2)(iv) | The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of over collateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. | X | ||
1122(d)(2)(v) | Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 240.13k-1(b)(1) of this chapter. | X | ||
1122(d)(2)(vi) | Unissued checks are safeguarded so as to prevent unauthorized access. | X |
APPLICABLE TO PLATFORM | ||||
REG AB REFERENCE | SERVICING CRITERIA | Performed Directly by the Company | Performed by Vendor(s) for which the Company is the Responsible Party | NOT APPLICABLE TO PLATFORM |
1122(d)(2)(vii) | Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations (A) Are mathematically accurate; (B) Are prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) Are reviewed and approved by someone other than the person who prepared the reconciliation; and (D) Contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. | X | ||
Investor remittances and reporting | ||||
1122(d)(3)(i) | Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) Are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) Provide information calculated in accordance with the terms specified in the transaction agreements; (C) Are filed with the Commission as required by its rules and regulations; and (D) Agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the servicer. | X | ||
1122(d)(3)(ii) | Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. | X | ||
1122(d)(3)(iii) | Disbursements made to an investor are posted within two business days to the servicer’s investor records, or such other number of days specified in the transaction agreements. | X | ||
1122(d)(3)(iv) | Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. | X | ||
Pool asset administration | ||||
1122(d)(4)(i) | Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents. | X | ||
1122(d)(4)(ii) | Pool asset and related documents are safeguarded as required by the transaction agreements. | X | ||
1122(d)(4)(iii) | Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements. | X |
APPLICABLE TO PLATFORM | ||||
REG AB REFERENCE | SERVICING CRITERIA | Performed Directly by the Company | Performed by Vendor(s) for which the Company is the Responsible Party | NOT APPLICABLE TO PLATFORM |
1122(d)(4)(iv) | Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the applicable servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents. | X | ||
1122(d)(4)(v) | The servicer’s records regarding the pool assets agree with the servicer’s records with respect to an obligor’s unpaid principal balance. | X | ||
1122(d)(4)(vi) | Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. | X | ||
1122(d)(4)(vii) | Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. | X | ||
1122(d)(4)(viii) | Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). | X | ||
1122(d)(4)(ix) | Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents. | X | ||
1122(d)(4)(x) | Regarding any funds held in trust for an obligor (such as escrow accounts): (A) Such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) Interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) Such funds are returned to the obligor within 30 calendar days of full repayment of the related pool asset, or such other number of days specified in the transaction agreements. | X | ||
1122(d)(4)(xi) | Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. | X |
APPLICABLE TO PLATFORM | ||||
REG AB REFERENCE | SERVICING CRITERIA | Performed Directly by the Company | Performed by Vendor(s) for which the Company is the Responsible Party | NOT APPLICABLE TO PLATFORM |
1122(d)(4)(xii) | Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission. | X | ||
1122(d)(4)(xiii) | Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements. | X | ||
1122(d)(4)(xiv) | Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements. | X | ||
1122(d)(4)(xv) | Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of this Regulation AB, is maintained as set forth in the transaction agreements. | X |
(a) | A review of the Servicer’s activities and of its performance under the applicable servicing agreement during the period from January 1, 2018 to December 31, 2018 has been made under my supervision. |
(b) | To the best of my knowledge, based on such review, the Servicer has fulfilled all its obligations under the applicable servicing agreement in all material respects throughout the aforementioned period. |
/s/ Ryan M. Hershberger |
Ryan M. Hershberger Assistant Treasurer of Ford Motor Credit Company LLC, as Servicer of Ford Credit Auto Owner Trust 2017-C |
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