Fitch Rates Honda Auto Receivables 2005-4 Owner Trust 'F1+/AAA'

NEW YORK--Aug. 1, 20056, 2005--Fitch assigns ratings to the receivables-backed class A notes issued today by Honda Auto Receivables 2005-4 Owner Trust as listed below:

-- $347,000,000 3.8272% class A-1 asset-backed notes 'F1+';

-- $409,000,000 4.32% class A-2 asset-backed notes 'AAA';

-- $433,000,000 4.46% class A-3 asset-backed notes 'AAA';

-- $306,960,000 4.60% class A-4 asset-backed notes 'AAA'.

The trust also issued $51,854,478 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.

Principal and interest on the notes is distributed monthly, commencing Sept. 21, 2005 with subsequent payment dates on the 21st 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, Aug. 1, 2005, the receivables included 97,847 automobile loans with a total principal balance of $1.55 billion. The 2005-4 transaction contains 83.85% new vehicles. Although the concentration is slightly higher than the 2005-3 transaction, it is relatively lower than that of prior Honda securitizations. The weighted average (WA) original term is 57.30 months, higher than 2005-3, but slightly lower than previous securitizations. The WA remaining term is 50.31 months, which results in a seasoning of seven months, the lowest since 2005-1. The WA APR on the pool is up slightly to 3.98% from 3.93% in 2005-3 but down considerably from the other 2005 transactions as a result of the high concentration of incentive loans in the 2005-3 and 2005-4 pools. The credit tier distribution for 2005-4, as captured by Honda's proprietary credit scores, is very similar to that of 2005-3 and generally comparable with those for previous transactions.

As before, California is the most represented state in the pool of receivables, with 16.59%. Texas (8.88%), Florida (5.66%), and Pennsylvania (5.63%) are the next most represented states. No other state accounts for more than 5.51% 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, 2005-4 is able to sustain more than 5.0% net losses without incurring a 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 and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.