Fitch Rates Honda Auto Receivables 2004-2 Owner Trust 'F1+/AAA'

NEW YORK--June 22, 2004--Fitch Ratings has assigned ratings to the receivables-backed class A notes issued today by Honda Auto Receivables 2004-2 Owner Trust (the trust) as listed below:

-- $471,000,000 1.63% class A-1 asset-backed notes 'F1+';

-- $534,000,000 2.52% class A-2 asset-backed notes 'AAA';

-- $535,000,000 3.30% class A-3 asset-backed notes 'AAA';

-- $271,900,000 3.81% class A-4 asset-backed notes 'AAA'.

The trust also issued $60,856,536.96 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 3.75% initial credit enhancement provided by the subordinated certificates (3.25%) 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 July 15, 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 126,088 automobile loans, with a total principal balance of $1.87 billion. The credit quality of the borrowers for 2004-2, as captured by Honda's proprietary credit scores, is one of the highest compared with previous transactions. Moreover, a comparison by credit tier distribution displays one of the largest concentrations in the higher credit tiers, as opposed to one of the lowest percentages in the lower credit tiers. These lower credit tiers typically charge-off at a higher frequency than the top tiers.

The weighted average APR is 4.39%. While higher than 2004-1, the weighted average APR for 2004-2 is comparable to that of previous transactions. The 2004-1 deal contained 6.77% of loans with an APR of 7% and more as compared with 8.64% in the 2004-2 deal.

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) the Fitch base case cumulative net loss estimate, which is consistent with an 'AAA' rating. Under the existing structure, 2004-2 is able to sustain more than 5% net losses without incurring shortfall of principal or interest on the class A notes.

HMC, AHFC's parent company, is Japan's third largest car manufacturer, a leading maker of motorcycles, motor vehicles, and power equipment and ranking among the world's top 10 manufacturers. Additionally, HMC enjoys an extremely competitive global position based on its capital and manufacturing efficiency and its reputation for producing high quality products. In the fiscal year ended March 31, 2004, HMC consolidated net income totaled $4,393 million, up 8.8% in comparison with the prior year. On a calendar year-to-date basis, Honda's U.S. market share is up 8.8% versus 8.3% at May 3, 20041, 2003.