Associates First Capital and Subs' Ratings Lowered By Fitch IBCA.

Business Editors

NEW YORK--(BUSINESS WIRE)--March 24, 2000

Associates First Capital Corp.'s (AFCC) senior debt, subordinated debt, and commercial paper ratings are lowered to `A+', `A', and `F1' from `AA-', `A+', and `F1+', respectively by Fitch IBCA. Additionally, the senior debt and subordinated debt ratings for AFCC's primary operating subsidiary, Associates Corp. of North America (ACONA) are lowered from `AA' and `AA-' to `AA-' and `A+', respectively. ACONA's commercial paper rating is affirmed at `F1+'. Approximately $68 billion of debt securities are effected by Fitch IBCA's actions.

Over the last 25 years, management has positioned AFCC as a growth company. During this period, its operating performance has been superior as it is one of select few U.S. companies to have reported increased earnings each year.

With the company's return to the public equity markets in 1996, new pressures were introduced and the importance of growth was heightened. During this period, many of AFCC's traditional markets were inundated by an unprecedented level of competition, particularly in the equipment finance and home equity sectors. Consequently, to help maintain lending margins, management increased AFCC's exposure in the personal lending and credit card segments, both higher risk businesses than the company's home equity and equipment finance businesses. With the increased participation in these segments along with some higher than expected losses in some of AFCC's other businesses, net chargeoffs have increased each year since 1995 and stood at 2.81% of managed assets for 1999. To management's credit, they have taken certain steps, including the discontinuation of the manufactured housing finance business that could eventually improve the risk profile of the company.

Over the last two years, AFCC's capitalization has weakened principally as a result of the company's aggressive acquisition program. The acquisition of Avco Financial Services, SPS Transaction Services, Inc., and The Northland Company added approximately $4.0 billion of goodwill and other intangibles to AFCC's balance sheet. As a result, the company's risk-adjusted capitalization has weakened from historical levels.

Fitch IBCA was at one time comfortable with the company's targeted range for leverage, defined as total debt divided by tangible equity, of 9.50x-10.00x. However, the risks inherent in operating at this level are significantly higher due to the $5.3 billion of goodwill and other intangible assets at Dec. 31, 1999 as well as the change in portfolio mix. Capital is expected to remain under pressure over the intermediate term with the acquisition of the KeyCorp credit card portfolio, which will add over $300 million of intangible assets to AFCC's balance sheet. As a result, the rating outlook remains negative due to Fitch IBCA's concerns about AFCC's asset quality and capitalization.

Based in Irving, TX, Associates First Capital Corp. is the largest publicly owned finance company in the world. The company provides consumer and commercial finance, leasing, insurance, and related services in the U.S. and 13 international markets.

Ratings Summary:

-- Associates First Capital Corp.: Senior debt, subordinated

debt, and commercial paper lowered to `A+', `A', and `F1'

from `AA-', `A+', and `F1+'.

-- Associates Corp. of North America: Senior debt and

subordinated debt lowered to `AA-' and `A+' from `AA' and

`AA-'. Commercial paper affirmed at `F1+'.

-- Associates Capital Corp. plc (Guaranteed by Associates First

Capital Corp.): Senior debt, subordinated debt, and

commercial paper lowered to `A+', `A', and `F1' from `AA-',

`A+', and `F1+'.

-- Associates First Capital B.V. (Guaranteed by Associates

First Capital Corp.): Senior debt, subordinated debt, and

commercial paper lowered to `A+', `A', and `F1' from `AA-'`,

`A+', and `F1+'.

-- AIC Corp. (Guaranteed by Associates First Capital Corp.):

Senior debt, subordinated debt, and commercial paper lowered

to `A+', `A', and `F1' from `AA-', `A+', and `F1+'.

-- Associates Financial Services of Puerto Rico, Inc.

(Guaranteed by Associates Corp. of North America):

Commercial paper affirmed at `F1+'.