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By clicking “I AGREE”, you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s information that becomes accessible to you (the “Information”). References herein to “Moody’s” include Moody’s Corporation. and each of its subsidiaries and affiliates..

 

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Rating Action:

Moody's downgrades CIT RV and Marine ABS from 1998 and 1999

04 Feb 2011

Approximately $38 million of asset-backed securities affected

New York, February 04, 2011 -- Moody's has downgraded four tranches from three transactions backed by recreational vehicle (RV) and marine installment sales contracts serviced by Vericrest Financial, Inc. (Vericrest). Vericrest Financial, Inc., formerly known as CIT Group/Sales Financing, Inc., was acquired by Lone Star Funds in 2009.

Issuer: CIT RV Trust 1998-A

Class B, Downgraded to B3 (sf); previously on Nov 02, 2010 Baa3 (sf) Placed Under Review for Possible Downgrade

Certificates, Downgraded to C (sf); previously on Nov 02, 2010 , Ca (sf) Placed Under Review for Possible Downgrade

Issuer: CIT RV Trust 1999-A

Class B, Downgraded to Ca; previously on Nov 02, 2010 Caa2 (sf) Placed Under Review for Possible Downgrade

Issuer: CIT Marine Trust 1999-A

Certificates, Downgraded to Ba2 (sf); previously on Nov 02, 2010 Baa2 (sf) Placed Under Review for Possible Downgrade

Certificates, Underlying Downgraded to Ba2 (sf); previously on Nov 02, 2010 Baa2 (sf) Placed Under Review for Possible Downgrade

Financial Guarantor: MBIA Insurance Corporation (B3; previously on 2/18/2009 Downgraded to B3 from Baa1)

RATINGS RATIONALE

The actions were prompted by higher pool lifetime cumulative net losses attributable mainly to continued U.S. economic weakness. Unlike other vehicle-backed ABS, the negative effect on losses has been more severe and long lasting due to the non-essential nature of the underlying collateral. As a result of longer financing terms of between 170 and 180 days, these transactions have experienced more than one economic downturn during their lives.

Moody's expects CIT RV Trust 1998-A to incur lifetime cumulative net losses (CNL) of 8.75% of the original pool balance. The initial expectation for this transaction at closing was 2.50%. Total hard credit enhancement (excluding excess spread of approximately 2.00% per annum) for class B notes is approximately 4% of the outstanding collateral pool balance. The transaction is under-collateralized by $ 5,756,729 which is equal to almost the entire amount of the outstanding certificates. The pool balance for this transactions is approximately 2% of the original pool balance.

For the CIT RV Trust 1999-A Moody's expects the lifetime CNL 9.80% of the original pool balance, compared to expectations of 2.50% at closing. The transaction is under-collateralized by $18,980,814 and both the certificates and the class B notes are accruing losses. The pool balance for this transactions is approximately 3% of the original pool balance.

Moody's expects the CIT Marine Trust 1999-A to incur lifetime CNL of 6.70% of the original pool balance, compared to expectations of 4.75% at closing. Total hard credit enhancement (excluding excess spread of approximately 1.5% per annum) for the certificates is approximately 11% of the remaining collateral balance. The pool balance for this transactions is approximately 2% of the original pool balance.

Ratings on the affected notes could be upgraded if the lifetime CNLs are lower by 5%, or downgraded if the lifetime CNLs are higher by 5%.

The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. The decision to take (or not take) a rating action is dependent on an assessment of a range of factors including, but not exclusively, the performance metrics. Primary sources of assumption uncertainty are the current macroeconomic environment, in which unemployment continues to rise, and weakness in the RV and marine market. Overall, Moody's central global scenario remains "Hook-shaped" for 2010 and 2011; we expect overall a sluggish recovery in most of the world largest economies, returning to trend growth rate with elevated fiscal deficits and persistent unemployment levels.

The principal methodology used in these notes was "Moody's Approach to Rating U.S. Auto Loan-Backed Securities" rating methodology published in June 2007.

The underlying ratings reflect the intrinsic credit quality of the securities in the absence of the transactions' guarantees from monoline bond insurers. The current ratings on the securities are consistent with Moody's practice of rating insured securities at the higher of the guarantor's insurance financial strength rating and any underlying rating.

Further information on Moody's analysis of this transaction is available on www.moodys.com.

In addition, Moody's publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck.

Moody's Investors Service did not receive or take into account a third party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, public information and confidential and proprietary Moody's Investors Service information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of maintaining a credit rating.

end

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

New York
John Park
MD - Structured Finance
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Apurva Thakkar
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's downgrades CIT RV and Marine ABS from 1998 and 1999
No Related Data.
© 2022 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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