Fitch Ratings has taken rating actions on the following four Associates Manufactured Housing Contract Trust pass-through certificates:
Series 1996-1:
--Class M affirmed at 'AA+';
--Class B-1 downgraded to 'AA' from 'AA+';
--Class B-2 downgraded to 'AA' from 'AA+'.
Series 1996-2:
--Class M affirmed at 'AA+';
--Class B-1 affirmed at 'BBB';
--Class B-2 remains at 'CC/DR3'.
Series 1997-1:
--Class M affirmed at 'AA+';
--Class B-1 downgraded to 'AA' from 'AA+';
--Class B-2 downgraded to 'AA' from 'AA+'.
Series 1997-2:
--Class A-6 affirmed at 'AAA';
--Class M affirmed at 'AA';
--Class B-1 downgraded to 'AA' from 'AA+';
--Class B-2 downgraded to 'AA' from 'AA+'.
The affirmations, affecting approximately $169.3 million of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. The ratings on classes B-1 and B-2 of series 1996-1, 1997-1, and 1997-2 are based on a limited guarantee from Associates First Capital Corporation (Associates), which completed a merger with Citigroup, Inc. in November of 2000. The downgrades of the limited guarantee bonds, affecting approximately $152 million of the outstanding certificates, reflect Fitch's downgrade of Citigroup's corporate rating to 'AA' on Nov. 5, 2007 (for details see the press release titled 'Fitch Ratings Discusses Downgrade on Citigroup's IDR to 'AA' on www.fitchratings.com).
The collateral supporting the above transactions consists of fixed-rate contracts secured by manufactured homes. All of the contracts were either originated or purchased by Associates and were originally serviced by Associates. In addition, all of the above transactions are structured to pay interest to the subordinate classes before paying principal to the senior classes.
As of the November remittance date, the respective pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) for series 1996-1, 1996-2, 1997-1, and 1997-2 are 14%, 12%, 14%, and 21% and the respective seasoning is 134, 132, 127, and 121 months. The respective cumulative losses (as a percent of the original collateral balances) for series 1996-1, 1996-2, 1997-1, and 1997-2 are 12.8%, 10.7%, 12.2%, and 18.1%.
Fitch's Distressed Recovery (DR) ratings are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money.
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.
