MOODY'S PLACES 19 CLASSES OF FIRST INTERNATIONAL BANK'S SMALL BUSINESS LOAN DEALS ON REVIEW FOR POSSIBLE DOWNGRADE
Moody's Investors Service has placed 19 classes of notes issued in seven securitizations originally sponsored by First International Bank (FIB) on review for possible downgrade. FIB is now known as UPS Capital Business Credit (UPSBC). The ratings actions are due to steeply lower-than-expected recovery rates that are being realized on defaulted loans since the last rating action taken on the securities, on January 10, 2003. FIB blames the declining recovery rates on the poor state of the manufacturing sector in the U.S. The complete ratings actions are as follows:
RATING ACTIONS
Issuer: First National Bank of New England SBA Loan-Backed Trust 1998-1
$6.15 million Class A Notes, rated Aa3, on review for possible downgrade
$0.68 million Class B Notes, rated Baa2, on review for possible downgrade
Issuer: First International Bank Trust 1999-1
$12.79 million Class A Notes, rated Aa3, on review for possible downgrade
$1.14 million Class M Notes, rated Ba2, on review for possible downgrade
$0.29 million Class B Notes, rated B3, on review for possible downgrade
Issuer: First International Bank Trust 2000-1
$16.14 million Class A Notes, rated A1, on review for possible downgrade
$1.84 million Class M Notes, rated Ba2, on review for possible downgrade
Issuer: First International Bank Trust 2000-2
$15.41 million Class A Notes, rated Aa3, on review for possible downgrade
$1.34 million Class M Notes, rated Baa3, on review for possible downgrade
Issuer: FNBNE Business Loan Trust 1998-A
$11.85 million Class A Notes, rated Aaa, on review for possible downgrade
$0.70 million Class M-1 Notes, rated A2, on review for possible downgrade
$0.70 million Class M-2 Notes, rated Baa2, on review for possible downgrade
Issuer: FIB Business Loan Trust 1999-A
$19.07 million Class A Notes, rated Aaa, on review for possible downgrade
$0.88 million Class M-1 Notes, rated A2, on review for possible downgrade
$0.88 million Class M-2 Notes, rated Baa3, on review for possible downgrade
Issuer: FIB Business Loan Trust 2000-A
$21.21 million Class A Notes, rated A1, on review for possible downgrade
$1.34 million Class M-1 Notes, rated Ba2, on review for possible downgrade
$1.48 million Class M-2 Notes, rated B1, on review for possible downgrade
$1.86 million Class B Notes, rated Caa2, on review for possible downgrade
FIB securities were downgraded on January 10, 2003 due to the deterioration in credit performance of the pools, which have a large concentration in the manufacturing sector. The pools have been adversely impacted by the recession in the manufacturing sector, which has been in a slump since the fourth quarter of 2000. Since the downgrade, recoveries have been lower than expected, while delinquencies have been generally constant across the seven transactions. Actual recoveries for defaulted loans have ranged from 9% in the 1999-A deal to 34% in the 1998-A transaction. The ratings review will consider the impact of lower and more variable recovery assumptions on defaulted loans and ultimate losses on the pools.
UPS Capital Corporation, a wholly-owned subsidiary of United Parcel Service, Inc., purchased FIB in August 2001. In April 2003, FIB changed its name to UPSBC. UPSBC is currently servicing the portfolio. FIB was formerly known as First National Bank of New England.
The notes were sold in a privately negotiated transaction without registration under the Securities Act of 1933 (the Act) under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A.
Further information is available on http://www.moodys.com
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