NEW YORK & CHICAGO–(EMWNews)–The weakened U.S. economy, declining dealership profitability impacted

by a stressed U.S. vehicle sales environment, and the weak credit

profiles of U.S. auto manufacturers will lead to worsening asset

performance of U.S. auto-related dealer floorplan asset-backed

securities during second half-2008 (2H’08), according to Fitch Ratings.

Dealer floorplan ABS, including those supported by auto-related

receivables, has performed within expectations through the second

quarter-2008 (2Q’08) in spite of the increased concerns, resulting in

rating affirmations on all outstanding dealer floorplan ABS

transactions, as per Fitch’s recently completed comprehensive portfolio

review.

However, Senior Director Ravi Gupta says that the expected continued

financial weakness of U.S. auto manufacturers and dealers may begin to

manifest itself in a declining asset performance outlook of auto-related

dealer floorplan ABS. Particular stress may be experienced in monthly

payment rates (MPR) for these transactions as an already weak new

vehicle sales environment may be further impacted by the expected

curtailments in retail vehicle lease financing programs offered by

captive finance companies of the major auto manufacturers.

“Rating volatility in the auto-related dealer floorplan sector also has

the potential to increase in the second half of this year,” said Gupta.

“In contrast, diversified floorplan, or non-auto related, receivables

are expected to continue to demonstrate rating stability despite

weakness related to the softening U.S. economy.”

Fitch’s new research report provides an overview and further details on

the U.S. floorplan ABS sector resulting from the annual portfolio review

and provides commentary on the lifetime performance of 18 outstanding

transactions rated by Fitch totaling approximately $23.9 billion.

Additionally, the report provides an overview of dealer floorplan

mechanics, describes key performance variables, and summarizes

performance trends through May 2008.

Fitch conducts is dealer floorplan ABS review annually in addition to

ongoing monthly transaction surveillance. This review included

transactions supported by auto-related as well as diversified (non-auto

related) floorplan receivables currently rated by Fitch and is detailed

in the new research report, ‘U.S. Dealer Floorplan ABS – Checking up on

Dealers’, which is available at www.fitchratings.com

under the following headers:

Structured Finance then ABS then Special Reports

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.

Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89

Get Unlimited Organic Website Traffic to your Website 
TheNFG.com now offers Organic Lead Generation & Traffic Solutions