SELECT AUTO RECEIVABLES TRUST 1991-5 RATED
SELECT AUTO RECEIVABLES TRUST 1991-5 RATED AAA' BY FITCH
-- FITCH FINANCIAL WIRE --
NEW YORK, Nov. 18 /PRNewswire/ -- Select Auto Receivables Trust 1991-5 $542 million asset backed certificates, Class A are rated AAA' by Fitch. The rating is based primarily on the high quality of Chrysler Financial Corp.'s (CFC) consumer auto receivables as well as the level of credit enhancement. Cash flow from the receivables will easily cover principal and interest on the certificates and the likelihood of a Chrysler bankruptcy affecting payments to the certificateholders is extremely remote.
The receivables consist of installment sale contracts secured by new and used automobiles and light duty trucks. Approximately 2 percent of the receivables were originated under Chrysler Credit Corp.'s Gold Key Plus program. These receivables have equal monthly payments with a final balloon payment which basically represents the "residual value" of the automobile. These receivables do not expose the pool to additional default risk because the final balloon payment was not sold to the trust.
Approximately 83 percent of the pool is secured by new and previously owned current model year vehicles. Because of Chrysler's conservative underwriting standards for used vehicles, Fitch does not view the 17 percent used vehicles as adding additional risk to the pool. The pool is also well diversified, having distributions comparable to other Select transactions with concentrations primarily in California, Texas, New York, New Jersey, and Florida. Although the weighted average seasoning is a modest two months, Fitch believes that Chrysler's prudent origination policies strongly contribute to the pool's overall credit quality.
Credit enhancement will be provided by a 9 percent subordinated class and a subordination spread account which will be funded with excess spread from the receivables. In addition, Chrysler Auto Receivables Co. (CARCO) will make an initial deposit of 15 basis points to the account. Over 500 basis points of excess spread will be available to fund the subordinated spread account as well as principal and interest otherwise distributable to the Class B holders. These deposits will be made until the spread account reaches 0.75 percent of the initial pool balance. Thereafter, excess spread will be available to cover only current losses or to bring the spread account to the required balance. Fitch believes that the level of subordination and the availability of the high level of excess spread supports the AAA' rating.
CARCO, a wholly owned special purpose subsidiary of CFC, purchased the loans from CFC and will be retaining the subordinated class. Because of the limited relationship subsequent to the certificate offering, Fitch believes that CARCO's retention of the subordinated class will not raise "true sale" concerns in the event of a bankruptcy of CFC or any other Chrysler companies.
/CONTACT: Mary Griffin, 212-908-0537, or Suzanne Mistretta, 212-908-0500, both of Fitch/
(C) CO: Select Auto Receivables Trust; Chrysler Financial Corp. ST: Michigan IN: AUT SU: RTG CK -- NY048 -- 1371 11/18/91 11:15 EST