Fitch Takes Various Rating Actions on Two FMAC Franchise Transactions

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CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has taken the following actions on two FMAC Loan Receivables Trusts as listed below:

Series 1997-A

--Class C affirmed at 'BBsf'; Negative Outlook;

--Class D revised to 'Dsf/RR3' from 'Dsf/RR2';

--Classes E and F affirmed at 'Dsf/RR6'.

In addition, the class C notes are removed from Rating Watch Negative.

Series 1998-C

--Class A-3 upgraded to 'BBBsf' from 'BBsf'; Stable Outlook;

--Class B affirmed at 'CCCsf/RR1';

--Class C revised to 'Dsf/RR5' from 'Dsf/RR3';

--Classes D, E, and F affirmed at 'Dsf/RR6'.

In addition, the class A-3 and B notes are removed from Rating Watch Negative.

All rating actions reflect the application of 'Surveillance Criteria for Franchise Loan ABS' dated May 20, 2011.

The affirmation of the class C notes in 1997-A reflects the class' ability to pass stress case scenarios consistent with the current rating. However, the default of just a few of the largest obligors could significantly threaten the credit support available to the class C notes. As a result, the class has been assigned a Negative Outlook. Recovery prospects for the class D notes have declined since the prior review, leading to the recovery rating (RR) revision. The class E and F notes have been written down and are not expected to receive any further payments, consistent with a 'Dsf/RR6'.

The upgrade and assignment of a Stable Outlook to the class A-3 notes in 1998-C reflects available credit support and the expectation that the class will pay in full in the near term. The affirmation of the class B notes at 'CCCsf/RR1' reflects Fitch's opinion that default is a possibility given the large concentration of defaulted obligors and the financial condition of those who are currently performing. Recovery prospects for the class C notes have declined since the prior review, leading to the RR revision. The class D, E, and F notes have been written down and are not expected to receive any further payments, consistent with a 'Dsf/RR6'.

Fitch will continue to monitor these transactions and may take additional rating action in the event of changes in performance and credit enhancement measures.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Surveillance Criteria for Franchise Loan ABS' (May 20, 2011);

--'Criteria for Structured Finance Recovery Ratings' (July 12, 2011);

--'Global Structured Finance Rating Criteria' (Aug. 4, 2011).

Applicable Criteria and Related Research:

Surveillance Criteria for Franchise Loan ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=627449

Criteria for Structured Finance Recovery Ratings

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=644902

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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.

Fitch RatingsPrimary AnalystPeter Manofsky, +1-312-368-2068DirectorFitch, Inc.70 West Madison St.Chicago, IL 60602orCommittee ChairBradley Sohl, +1-312-368-3127Senior DirectororMedia RelationsBrian Bertsch, +1-212-908-0549 (New York)[email protected]

Source: Fitch Ratings

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