Fitch Expects To Rate Ford Credit Auto Owner Trust 2002-C 'AAA'

    NEW YORK--June 20, 2002--Fitch Ratings expects to rate Ford Credit Auto Owner Trust 2002-C as follows:

    --$409,000,000 class A-1 1.86% asset-backed notes 'F1+';

    --$200,000,000 class A-2a 2.48% asset-backed notes 'AAA';

    --$655,000,000 class A-2b floating-rate asset-backed notes 'AAA';

    --$585,000,000 class A-3 3.44% asset-backed notes 'AAA';

    --$262,268,000 class A-4 4.03% asset-backed notes 'AAA';

    --$60,198,000 class B 4.71% asset-backed notes 'A';

    --$40,132,000 class C 5.53% asset-backed notes 'BBB+';

    --$40,132,000 class D 6.00% asset-backed certificates (retained by the seller).

    The expected ratings on the notes and certificates are based upon their respective levels of subordination, the specified credit enhancement amount, which consists of funds in the reserve account and overcollateralization, the yield supplement overcollateralization amount (YSOC, explained below), the terms of the interest rate swap, and the financial strength of the swap counterparty (Bank of America, N.A.). All expected ratings reflect the transaction's sound legal structure, the high quality of the retail auto receivables originated by Ford Motor Credit Company (Ford Credit) and the strength of Ford Credit as servicer.
    The 2002-C transaction is backed by a pool of new and used automobile and light truck loans. 0% APR loans, typically extended to the highest credit quality borrowers, have been included into the transaction for the first time. 29.6% of the receivables have rates below 0.50%, compared to just 0.01% for 2002-B, resulting in the lowest weighted average APR to date. The 2002-C transaction incorporates the YSOC feature to compensate for receivables with interest rates below 7%. The YSOC is subtracted from the pool balance to calculate bond balances and the first priority, second priority, and regular principal distribution amounts, resulting in the creation of 'synthetic' excess spread. These amounts enhance the receivables' yield and are available to cover losses and turbo the class of securities then entitled to receive principal payments.
    Initial collateralization for the class A notes as a percentage of collateral balance less YSOC is 5.5% and consists of 5% subordination from the class B notes (3%) and the class C notes (2%), and the 0.5% initial deposit to the reserve account. After the closing date, the specified credit enhancement amount for all classes of notes and certificates, which consists of both the reserve account and overcollateralization, is 1%, thereby bringing the total target class A credit enhancement to 6%. Initial collateralization for the class B notes as a percentage of collateral balance minus YSOC is 2.5% and consists of the 2% subordination of the class C notes and the 0.5% reserve account. The target enhancement is 3% and is made up of the subordination of the class C notes and the specified credit enhancement, as described above. Initial collateralization for the class C notes as a percentage of collateral balance minus YSOC is 0.5% provided by the reserve account. The target enhancement is 1%.
    In addition to collateralization levels for each class of notes discussed above, under the expected base case scenario excess spread provides an additional 2% enhancement in the form of class D (privately placed) subordination. On the closing date, the aggregate principal balance of the notes and certificates will be 102% of the initial pool balance less the YSOC. The class D certificates represent the uncollateralized 2%. During amortization, both excess spread and principal collections are available to reduce the bond balance. Hence, if excess spread is positive the bonds will amortize more quickly than the collateral. It is this mechanism that ensures that the class D certificates are collateralized and the specified credit enhancement level is achieved.
    Furthermore, the 2002-C transaction provides significant structural protection through a shifting payment priority mechanism. In each distribution period, a test will be performed to calculate the amount of desired collateralization for the notes versus the actual collateralization. If the actual level of collateralization is less than the desired, then payments of interest to subordinate classes may be suspended and made available as principal to higher rated classes.
    Based on the loss statistics of Ford Credit's prior securitizations, and Ford's U.S. retail portfolio performance, Fitch Ratings expects consistent performance from the pool of receivables in the 2002-C pool. For the nine months ending Sept. 30, 2001, Ford's net retail portfolio of approximately $80 billion had 60+ day delinquencies as a percentage of average contracts outstanding of 0.72%, and net losses as a percentage of the average net outstanding principal balance were 1.29%.