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Fitch Publishes First-Ever U.S. Auto Loan ABS Seller/Servicer Criteria.

NEW YORK -- Fitch Ratings has published the first-ever rating methodology specifically for U.S. auto loan ABS seller/servicers, focusing on three principal areas - corporate background, origination and underwriting, and servicing - each with various subcategories.

As Fitch has indicated in recent commentary, the auto industry is in a state of flux with certain US manufacturers struggling, wholesale prices under pressure and the US consumer increasingly challenged. Further changes in manufacturer and consumer health could put additional stress on the origination and servicing operations of ABS auto loan seller/servicers.

'While Fitch's auto loan ABS ratings have always included a seller/servicer evaluation, the new criteria formalizes and standardizes this information at a critical time,' said Managing Director Stephanie Petosa.

Corporate background analysis centers on the quality of the company's management, its financial strength, and its ability to manage operational risk at a corporate level. Evaluation of origination and underwriting activities covers origination channels, marketing, dealer relationship management, credit approval process, underwriting criteria, and internal scoring systems. The servicing review focuses on account maintenance, customer service, billing and payment processing, collections, repossession and disposition, investor reporting, staffing and training, and technology.

Fitch expects to apply ratings to captive finance companies, banks, independent finance companies and third-party servicers. Asset types will include both prime and sub-prime auto loans.

'The seller/servicer ratings will be used to augment Fitch's collateral and structural analysis when determining credit enhancement levels,' said Senior Director Jennifer San Cartier.

Fitch supplements its annual seller\servicer reviews with on-going deal surveillance and periodic portfolio reviews of all auto loan ABS issuers.

Fitch rates ABS seller/servicers on a scale of 1 to 5, with 1 being the highest rating. Within rating levels 2 and 3, Fitch further differentiates ratings by plus (+), and a minus (-) between flat ratings 1 through 3. Since 2004, Fitch has published the ratings on a series of credit card and student loan seller/servicers, with several reviews currently in progress.

The report, titled 'Rating U.S. Auto Loan ABS Seller/Servicers', is a product-specific addenda to 'Rating ABS Seller/Servicers: Credit Where Credit is Due' which established general ABS seller/servicer rating methodology. Both reports are available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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Publication:Business Wire
Date:Jan 22, 2007
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