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S&P Rates Mellon Auto Grantor Trust 2000-1 Certs

11 April 2000

S&P Rates Mellon Auto Grantor Trust 2000-1 Certs

    NEW YORK--Standard & Poor's--April 10, 2000-- Standard & Poor's assigned its ratings to Mellon Auto Grantor Trust 2000-1's US$351.3 million asset-backed certificates series 2000-1 (see list).

    The ratings are primarily based on:

    -- Three percent subordination provided for the class A
    certificates by the class B certificates;

    -- A 4.75% cash reserve account for both certificate classes;

    -- Low historical portfolio loss and delinquency experience;

    -- Approximately 1.7% in annual excess spread; and

    -- A sound legal structure.

    Principal payments for both the class A and B certificates will be made on a pro rata basis, with the class A certificates receiving their principal distributions before the class B certificateholders.
    The reserve account is funded with an initial deposit of 3.00% of the principal balance, with a cap representing 4.75% of the current balance, and a floor of 0.75% of the principal balance. The initial deposit and cap have increased by 1.50% and 1.75%, respectively, from Mellon Auto Grantor Trust 1999-1, providing the additional enhancement for the class B certificates to be rated double-'A', compared to single-'A'-plus in the 1999-1 securitization. The reserve account buildup from the initial amount to the cap will be effected through excess spread.
    Mellon's loan portfolio grew 80%, from US$195.6 million to US$352.2 million, by fiscal year-end 1998, and 82%, to US$641.1 million, by fiscal year-end 1999. Delinquencies for the same period were at 1.04% and 1.05%, respectively. Fiscal year-end 1998 and 1999 net losses, as a percentage of the average portfolio balance, were 0.25% and 0.49%, respectively, due to growth.
    The 2000-1 pool has 10% more contracts with a remaining term exceeding 60 months than the 1999-1 pool (29% versus 19%). Seasoning of six months and vehicle concentration by age, at 54% new and 46% used, are similar to the 1999-1 pool. This pool also has high geographic concentrations in Pennsylvania (72.2%), Delaware (11.9%), and New Jersey (10.0%), the three states that comprise the bank's home base.
    Standard & Poor's expects this pool to experience cumulative net losses of between 1.0% and 1.5%. Total credit enhancement, consisting of subordination, the reserve account, and excess spread, covers a sufficient multiple of expected losses for the ratings, Standard & Poor's said.--CreditWire

    RATINGS ASSIGNED

    Mellon Auto Grantor Trust 2000-1
    Class      Amount (US$)      Rating
    A           340,723,000      AAA
    B            10,538,292      AA