Fitch Rates HSBC Automotive Trust (USA) 2007-1 'F1+/AAA'.

NEW YORK -- Fitch rates HSBC Automotive Trust (USA) 2007-1 as follows:

--$221,600,000 5.326% class A-1 notes 'F1+';

--$270,200,000 5.32% class A-2 notes 'AAA';

--$235,300,000 5.30% class A-3 notes 'AAA';

--$132,303,000 5.33% class A-4 notes 'AAA'.

The 2007-1 transaction marks HSBC Finance Corp.'s (HFC) 21st securitization backed by retail installment sales contracts to subprime borrowers secured by new and used automobiles and light duty trucks. This is HFC's eighth consecutive transaction featuring a senior/subordinate structure. The ratings are based upon the available credit enhancement, the transaction's sound legal structure, and the capabilities of HFC as servicer and HSBC Auto Finance Inc. (HAF) as subservicer.

Interest is distributed pro rata amongst the class A notes on the 17th of each month or the following business day beginning March 19, 2007. Principal is paid sequentially, beginning with the class A-1 notes.

Initial credit enhancement levels for the class A notes is 28.5%, consisting of 27.5% overcollateralization (OC) and a 1% reserve account. The targeted OC level of 32.5% of the ongoing pool balance is to be funded through the application of excess spread and is subject to a floor of 3.25% of the original pool balance. The targeted reserve account balance is 3% of the ongoing pool balance, with a floor of 2% of the original pool balance, and will build as excess spread is trapped.

As of Jan. 16, 2007 (the cut-off date), the receivables consisted of $1.19 billion in loans to subprime borrowers with weighted average FICO scores of 614 and a weighted average APR of 14.28%. The weighted average original maturity of the pool was 67.69 months, and the weighted average remaining term was 59.49 months, resulting in approximately 8.20 months of seasoning. Approximately 29.4% of the pool consists of loans secured by new vehicles. Analysis of credit scores and static pool data shows similar underlying collateral and credit profiles of borrowers to those of previous transactions. Therefore, under normal economic conditions, Fitch expects performance of the 2007-1 transaction to be similar to that of the 2006-3 transaction.

HFC (rated 'AA-/F1+' Outlook Positive by Fitch), through its subsidiaries, is a leading provider of consumer finance products with a managed auto loan portfolio of approximately $11.6 billion. The company primarily provides middle-market consumers with real estate secured loans, auto finance loans, MasterCard and Visa credit card loans, private label credit card loans, personal non-credit card loans, and tax refund anticipation loans. HFC's operations are mainly conducted in the U.S. with a presence in the U.K. and Canada. HFC is a wholly owned subsidiary of HSBC Holdings plc (rated 'AA/F1+' Outlook Positive by Fitch).

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