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I AGREE
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
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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.
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