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Fitch IBCA Publishes Review of 'Big Three' Auto Captive

4 May 1998

Fitch IBCA Publishes Review of 'Big Three' Auto Captives - Fitch IBCA Financial Wire -

    NEW YORK, May 4 -- Asset quality and profitability
performance levels were within historical ranges and prominent market
positions allowed the "Big Three" auto captives -- General Motors Acceptance
Corp., Ford Motor Credit Corp. and Chrysler Financial Corp. -- to adapt to
business conditions, according to the new Fitch IBCA special report, "The 'Big
Three' Auto Captives: A Year In Review," to be published tomorrow.
Furthermore, despite 1997 proving to be a challenging year, the auto captives
managed to continue to fulfill their primary mission of supporting the unit
sales of their respective parent companies through retail and wholesale
financing channels.
    As detailed in the report, there are two ways in which to examine the auto
captive finance companies: as subsidiaries of very large manufacturing
companies or as auto financiers.  While ratings tend to be driven by the
corporate affiliation, the finance company's performance is also important
because of its relatively stable earnings and debt service capacity over the
short term, as well as the ability to upstream dividends to the parent,
diversity the corporate revenue base and enhance parent company unit sales.
Nevertheless, the ratings of these finance captives are expected to stay
directly linked to the ratings of their parent companies under current and
foreseeable circumstance.
    Also discussed in the report are the industry challenges facing the
captives during 1998.  These challenges include: heightened competition from
commercial banks and specialty consumer finance companies, consumer credit
quality and price levels in the used car markets.
    As providers of retail and wholesale auto finance, the auto captives are
market leaders and significant in their own right.  Auto captives execute the
interest and lease incentive programs for the parent companies, play an
integral role in protecting market share, and set the pricing and product
standards against which all independent auto lenders and banks must compete.
    For a copy of the report, visit the Fitch IBCA web site at
http://www.fitchibca.com or call 800-853-4824.

SOURCE  Fitch IBCA, Inc.