Fitch Rates Household Automobile Trust 2002-2 A-B Notes 'AAA'

    NEW YORK--Aug. 28, 2002--Fitch rates the auto receivable asset-backed notes issued by Household Automobile Trust 2002-2 as listed below:

    --$255,000,000 1.770% class A-1 money market notes 'F1+';

    --$345,000,000 2.150% class A-2 notes 'AAA';

    --$313,000,000 2.850% class A-3 notes 'AAA';

    --$287,000,000 floating-rate class A-4 notes 'AAA'.

    The 2002-2 transaction marks Household Finance Corp.'s (HFC) 10th securitization backed by retail loans to subprime borrowers. The securities were issued with a financial guaranty insurance policy from Ambac Assurance Corp. (Ambac), which is rated 'AAA' by Fitch Ratings. The insurance policy ensures full and timely payment of interest and principal by the legal final distribution date. Fitch's ratings are based on the terms of the financial guaranty insurance policy and insurer financial strength rating of Ambac, the transaction's sound legal and cash flow structure, and the capabilities of HFC as servicer and Household Automotive Finance Corp. (HAFC) as sub-servicer of the receivables.
    Interest and principal on the notes are distributed monthly, beginning Sept. 17, 2002. Principal payments on the notes are made sequentially, beginning with the class A-1 notes until paid in full. Before drawing upon the insurance policy, losses will be covered by excess spread, 6% initial overcollateralization (OC) (with a target of 9.5%), and a 1% spread account (which grows to 3% of the outstanding pool balance, with a floor of 2% of the initial collateral balance).
    The receivables in the 2002-A trust are simple interest receivables made with respect to new (22.3%) and used (77.7%) automobiles and light-duty trucks and vans. As of the statistical cutoff date, July 24, 2002, the aggregate principal on the pool was $1,276,595,762 and the weighted average APR on the loans was 17.68%. The pool is well diversified geographically, with Texas, Florida and California accounting for 12.78%, 10.67%, and 10.51% of the pool, respectively.
    HAFC, the sub-servicer, is a wholly owned special purpose subsidiary of the servicer, HFC, which is a wholly owned subsidiary of Household International, Inc. (Household; rated 'F1/A', Rating Outlook Negative by Fitch,). HAFC, headquartered in San Diego, was created in 1997 through the merger of a subsidiary of Household and nonprime auto lender ACC Consumer Finance Corp. (ACC) of San Diego. Since the acquisition, HAFC has increased originations and initiated numerous underwriting, systems, and collections enhancements. As of June 30, 2002, HAFC's serviced portfolio consisted of approximately $6.9 billion in auto loans.