Fitch Rates Honda Auto Receivables 2006-2 Owner Trust 'F1+/AAA'

NEW YORK--Aug. 22, 2006--Fitch has assigned ratings to the Honda Auto Receivables 2006-2 Owner Trust asset-backed class A notes as follows:

-- $262,000,000 5.42500% class A-1 'F1+';

-- $292,000,000 5.42% class A-2 'AAA';

-- $412,000,000 5.30% class A-3 'AAA';

-- $267,722,000 5.28% class A-4 'AAA'.

The trust is also issuing $41,274,911 in privately rated and initially retained certificates. Fitch's ratings address the likelihood that 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 3.75% initial credit enhancement provided by the 3.25% subordinated certificates and the 0.50% reserve account, the yield supplement account (YSA) designated to compensate for low annual percentage rates (APR), and the availability of excess spread.

Principal and interest on the notes will be distributed monthly, commencing Sept. 21, 2006 with subsequent payment dates on the 21st of each month. Principal is distributed on a modified pro rata basis, with the class A notes initially receiving all principal collections beginning with the class A-1 notes until paid in full. Once the class A-1 and A-2 notes are retired, principal is still distributed sequentially among the remaining class A notes but pro rata with the certificates. The structure includes a trigger that switches distributions back to sequential if the reserve account is reduced to less than 0.25% of the original pool balance, provided the bond balance is greater than the reserve account balance.

The receivables consist of a pool of retail installment sales contracts originated by AHFC through its nationwide network of authorized Honda and Acura dealers. The receivables include 71,243 automobile loans with a total principal balance of $1.27 billion. New vehicles represent 84.93% of the pool versus 15.07% used vehicles. The weighted average (WA) original term is 57.78 months, lower than the previous transaction. The WA remaining term is 53.54 months, which results in a seasoning of 4.24 months. The WA APR on the pool is higher than recent transactions at 7.12%, reflective of the rising interest rate environment. The credit tier distribution for 2006-2, as captured by Honda's proprietary credit scores, is similar to that of 2006-1 and is generally comparable with those for previous transactions, demonstrating the increase in WA APR is not indicative of weaker credit obligors.

As before, California is the most represented state in the pool of receivables, with 17.31%. Texas (9.72%), Florida (6.53%), and New Jersey (6.19%) are the next most represented states. No other state accounts for more than 4.64% 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, 2006-2 is able to sustain 5.32% net losses without incurring a shortfall of principal or interest on the class A notes.

Honda Motor Co., Ltd. (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 a 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.