Fitch Rates Honda Auto Receivables 2005-3 Owner Trust 'F1+/AAA'

NEW YORK--June 14, 2005--Fitch assigns ratings to the receivables-backed class A notes issued today by Honda Auto Receivables 2005-3 Owner Trust as listed below:

-- $340,000,000 3.42005% class A-1 asset-backed notes 'F1+';

-- $345,000,000 3.73% class A-2 asset-backed notes 'AAA';

-- $440,000,000 3.87% class A-3 asset-backed notes 'AAA';

-- $199,875,000 4.03% class A-4 asset-backed notes 'AAA'.

The trust also issued $45,922,951 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 3.85% initial credit enhancement provided by the 3.35% subordinated certificates and the 0.50% nondeclining reserve account.

Two notable changes occurred in the 2005-3 transaction, compared with prior AHFC deals. The first one is a 10 bps increase in initial enhancement to 3.85% of the initial pool balance, resulting from a 10 bps increase in subordination to 3.35%, designed to compensate for a reduction in excess spread in the transaction. The second change relates to the reserve fund, which no longer grows to 0.75% of the initial pool balance, but remains at its initial level of 0.50% of the initial pool balance.

Principal and interest on the notes is distributed monthly, commencing July 18, 2005 with subsequent payment dates on the 18th of each month. 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 consist of a pool of retail installment sales contracts originated by AHFC through its nationwide network of authorized Honda and Acura dealers. As of the cutoff date, the receivables included 91,781 automobile loans with a total principal balance of $1.37 billion. The 2005-3 transaction contains 81.72% new vehicles. Although an elevated concentration, it is relatively lower than that of prior Honda securitizations. With a weighted average (WA) original term of 56.34 months and a WA remaining term of 48.08 months, the resulting seasoning is 8.26 months, the highest in the past two years. The WA APR on the pool declined to 3.93% from 4.64% and 5.02% in 2005-2 and 2005-1, respectively, as a result of increased incentive loans in the pool. The credit tier distribution for 2005-3, as captured by Honda's proprietary credit scores, is stronger than that of 2005-2 and comparable to previous transactions.

As before, California is the most represented state in the pool of receivables, with 18.50%. Texas (7.90%), New York (6.45%), and Florida (5.60%) are the next most represented states. No other state accounts for more than 5.60% of the pool. Geographic diversification protects the transaction in the event of a regional downturn.

Business and credit stress scenarios were applied to the collateral to ensure that the structure is sufficient to withstand 'AAA' scenarios. Under the existing structure, 2005-3 is able to sustain more than 5.0% net losses without incurring shortfall of principal or interest on the class A notes.

HMC, AHMC's parent company, is Japan's third largest car manufacturer, a leading maker of motorcycles, motor vehicles, and power equipment, and ranks among the world's top 10 manufacturers. Additionally, HMC enjoys an extremely competitive global position based on its capital and manufacturing efficiency and reputation for producing high quality products.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.