ACE Funding Ltd. Assigned AA-/A-1+ Rtgs by S&P.

MELBOURNE, Australia--(BUSINESS WIRE)--Sept. 22, 1999--

Standard & Poor's today assigned its double-'A'-minus rating to ACE Funding Ltd.'s (ACE Funding) A$383.3 million series 1999-1 class A1 medium-term notes (class A1 MTNs) and its 'A-1'-plus rating to ACE Funding's A$180 million series 1999-1 class A2 medium-term notes (class A2 MTNs).

This is the first domestic issue by ACE Funding and follows its first issue in July 1999 of Euro-denominated euro medium-term notes.

The underlying collateral for the class A1 and A2 MTNs is four series of Australian dollar-denominated, double-'A'-minus rated, class A floating-rate notes (ABF notes) issued by SG Australia Asset Management Co. Pty Ltd. as trustee of the Asset Based Financing Trust. The class A1 MTNs have a rated maturity date of May 10, 2006, which reflects the legal maturity dates of the ABF notes. The class A2 MTNs have a rated maturity date of Sept. 10, 2000, which reflects the principal pass-through schedule of the ABF notes. To assess the timely payment of principal on the class A2 MTNs, several stressed cash flow scenarios, reflecting Standard & Poor's criteria, were run for the ABF notes.

The ratings on the MTNs issued by ACE Funding reflect:

-- The credit quality of the underlying collateral, which has a

rating of double-'A'-minus;

-- The ratings on SG Australia Ltd.

(double-'A'-minus/Negative/'A-1'-plus); and

-- The sound legal structure of the transaction.

ACE Funding is a special-purpose company incorporated in the Australian Capital Territory, Australia. It has been established to raise funds via the issuance of debt securities (notes) in either the domestic or euro markets. The ACE Funding structure enables multiple issues of notes, with each notes issue a series. Different series may carry different ratings from Standard & Poor's, or be unrated, but each new series will be reviewed by Standard & Poor's to ensure that the ratings on outstanding series are not detrimentally impacted by the issue of a new series. A series may consist of one or more classes, and a class may consist of one or more tranches.

The class A1 MTNs will be privately placed into the ACE Series 2 commercial paper conduit. The ACE Series 2 subtrust, which holds the class A1 MTNs, will enter into a revolving cash advance facility (RCA), under which the ACE Funding Series 1999-1 MTN ABF subtrust will advance principal received under the ABF notes up to a limit of A$180 million. Advances under the RCA can only be used by the ACE Series 2 commercial paper conduit to fund the holding of class A1 MTNs. Any principal pass-through from the ABF notes received in excess of A$180 million will be applied to the class A1 MTNs as principal reductions. The RCA is repayable in full by the ACE Series 2 subtrust under certain circumstances, including the rated maturity date of the class A2 MTNs. Principal repaid under the RCA will be used to repay the class A2 MTNs.

The rating assigned to the class A1 and A2 MTNs issued by ACE Funding reflects its ability to pay interest to the class A1 and A2 MTN holders in full on each monthly interest payment date and to repay principal in full no later than the final maturity dates according to the terms and conditions of the class A1 and A2 MTNs, Standard & Poor's said. -- CreditWire.