S&P Puts Var MMCA Auto Owner Trust Deals on WatchNeg

    NEW YORK--Standard & Poor's--Feb. 13, 2003--Standard & Poor's Ratings Services today placed various series of MMCA Auto Owner Trust transactions, which were originated in 2001 and 2002, on CreditWatch with negative implications (see list).
    The CreditWatch actions reflect the adverse performance displayed by the underlying collateral pools and the deteriorating credit enhancement of the trusts.
    A primary factor adversely affecting the collateral performance of these transactions is the inclusion of balloon loans (receivables which provide for equal monthly payments and one substantially larger final balloon payment) and deferred payment loans (receivables that provide that the first payment is deferred for a specified period -- between 50 and 480 days -- and for equal monthly payments for the remainder of the term of the receivable) in the collateral pools, as each of these loan programs can result in higher loss severity upon default. For the transactions originated in 2001, all obligors with balloon contracts have the option of returning the vehicles at the end of the term of the receivable (for the deals originated in 2002, only a percentage of the obligors have this option). Thus, aside from the credit risk, there is also a level of residual risk associated with these types of contracts. Typically, where there is a balloon loan in place, the level monthly payments have been lowered to facilitate the sale of the vehicle. As a result, less of the loan is paid off when the balloon payment comes due. In addition, given the high rebates and price incentives that currently exist in the market for new vehicles, a high return rate is expected at the end of the level payment term. High return rates, in conjunction with the potentially high severity of loss, may result in significant residual losses.
    In July 2002 the servicer, Mitsubishi Motor Credit of America, Inc. (MMCA), infused $64,127,248 into the reserve account for the 2001-3 transaction and amended the documents to increase the specified reserve balance from 2.25% to 6.50% of the initial adjusted principal balance.
    Standard & Poor's will complete a detailed review of the credit performance associated with the underlying assets, relative to the remaining credit support available to support the notes, in order to determine if any rating actions are necessary.



RATINGS PLACED ON CREDITWATCH NEGATIVE

MMCA Auto Owner Trust 2001-3

                Rating
Class     To                From
A-3       AAA/Watch Neg     AAA
A-4       AAA/Watch Neg     AAA
B         A/Watch Neg       A

MMCA Auto Owner Trust 2001-4

                 Rating
Class     To                From
A-3       AAA/Watch Neg     AAA
A-4       AAA/Watch Neg     AAA
B         A/Watch Neg       A

MMCA Auto Owner Trust 2002-1

                 Rating
Class     To                From
A-2       AAA/Watch Neg     AAA
A-3       AAA/Watch Neg     AAA
A-4       AAA/Watch Neg     AAA
B         A/Watch Neg       A
C         BBB/Watch Neg     BBB

MMCA Auto Owner Trust 2002-2

                 Rating
Class     To                From
A-2       AAA/Watch Neg     AAA
A-3       AAA/Watch Neg     AAA
A-4       AAA/Watch Neg     AAA
B         A/Watch Neg       A
C         BBB/Watch Neg     BBB

MMCA Auto Owner Trust 2002-3

                 Rating
Class     To                From
A-2       AAA/Watch Neg     AAA
A-3       AAA/Watch Neg     AAA
A-4       AAA/Watch Neg     AAA
B         A/Watch Neg       A
C         BBB/Watch Neg     BBB