Fitch Rates Honda Auto Receivables 2004-1 Owner Trust 'F1+/AAA'

NEW YORK--April 21, 2004--Fitch Ratings has assigned ratings to the receivables-backed class A notes issued today by Honda Auto Receivables 2004-1 Owner Trust as listed below:

-- $347,000,000 1.13875% class A-1 asset-backed notes 'F1+';

-- $456,000,000 1.68% class A-2 asset-backed notes 'AAA';

-- $431,000,000 2.40% class A-3 asset-backed notes 'AAA';

-- $301,000,000 3.06% class A-4 asset-backed notes 'AAA'.

The trust also issued $47,514,648.12 in certificates that are retained by the seller and not rated. Fitch's ratings address the likelihood that the noteholders receive full payments of interest and principal in accordance with the terms of the transaction documents. The ratings on the class A notes are based on the high quality of the receivables originated and serviced by American Honda Finance Corporation (AHFC), the transaction's sound legal and cash flow structure, the yield supplement account (YSA), and the 3.50% initial credit enhancement provided by the subordinated certificates (3.00%) and a 0.50% non-declining reserve fund which grows to a target of 0.75% of the initial pool.

Principal and interest on the notes is distributed monthly, commencing on May 2, 20041, 2004. Principal is distributed on a modified pro-rata basis, with the class A-1 notes receiving all principal collections until paid in full. Once the class A-1 notes are retired, principal is distributed sequentially among the remaining class A notes, but pro rata with the certificates. The certificate interest and principal payments are subordinated to the note interest and principal payments, as well as payments to the reserve account.

The receivables include 102,798 automobile loans, with a total principal balance of $1.58 billion. The credit quality of the borrowers for 2004-1, as captured by Honda's proprietary credit scores and credit tiers distribution, is similar than that of previous transactions. The weighted average APR is 3.87%, lower than that of all previous transactions. The steady decline in APRs is due primarily to the low interest rate environment and ongoing competition. The 2004-1 transaction includes an increased amount of loans with an APR below 4.99% as compared to 2003-5 (84.47% versus 76.33%). This increase in lower APR's, and ultimate reduction in the weighted average APR (3.87% versus 4.34%) can be attributed to incentive programs that have been running on select vehicle models.

Business and credit stress scenarios were applied to the collateral to insure that the structure is sufficient to withstand 'AAA' scenarios. Under the available credit enhancement, the class A notes can sustain more than 5.0 times (x) Fitch Ratings' base case cumulative net loss estimate, which is consistent with a 'AAA' rating. Under the existing structure, 2004-1 is able to sustain more than 5.1% net losses without incurring shortfall of principal or interest on the class A notes.

AHFC, the captive finance subsidiary of Honda Motor Co., Ltd. (HMC), originates and services retail auto sales contracts and is rated 'F1' by Fitch Ratings. HMC is Japan's third largest car manufacturer and a leading maker of motorcycles, motor vehicles and power equipment, and ranks among the world's top 10 manufacturers. On a calendar year-to-date basis, Honda's sales in the key U.S. auto market are up 9.8% in a market that is down 1.5% on the same basis. At month ending December 2003, Honda's share in the U.S. market was 8.1%.