DCR Assigns Preliminary Ratings to Premier Auto Trust 1999-3
17 June 1999
DCR Assigns Preliminary Ratings to Premier Auto Trust 1999-3
NEW YORK, June 16 -- Duff & Phelps Credit Rating Co. (DCR)
has assigned the following preliminary ratings to the notes issued by Premier
Auto Trust 1999-3:
Security Preliminary Rating Amount Coupon Final Maturity
Class A-1 Notes 'D-1+'(D-One-Plus) $280,000,000 5.116% March 8, 2000
Class A-2 Notes 'AAA'(Triple-A) $480,000,000 5.820% February 8, 2002
Class A-3 Notes 'AAA'(Triple-A) $390,000,000 6.270% April 8, 2003
Class A-4 Notes 'AAA'(Triple-A) $300,684,000 6.430% March 8, 2004
Class B Certificates N/R $ $56,520,000 December 8, 2005
The ratings on the notes are based on the credit enhancement
(overcollateralization, subordination of the Class B Certificates, and a
reserve account), full turbo structure that uses excess spread to fast pay the
notes, CFC's considerable experience in servicing the receivables, and the
strong legal structure of the transaction.
DCR's preliminary ratings on the Premier Auto Trust 1999-3 notes are
comparable to those on the previous CFC transactions. Credit enhancement
levels are identical to that of Series 1999-2 and 1999-1. The Class B
certificates (retained by CFC) do not bear interest and will not receive any
principal distributions until all of the Class A notes are paid in full. This
feature offers more protection for the Class A notes by making available all
monthly collections to the Class A notes until the Class A notes are paid in
full.
Credit enhancement for the Class A notes is provided by subordination,
overcollateralization, and a reserve account. The Class A notes depend on the
approximately 3.75 percent subordination of the Class B certificates. In
addition, overcollateralization, initially 4.00 percent of the initial
security balance (approximately $60 million), will grow as the notes are
turboed. The overcollateralization for this transaction is the same as in
Premier Auto Trust 1999-2 and 1999-1. So long as excess spread is available,
credit enhancement in the form of overcollateralization will grow throughout
the life of the transaction. Furthermore, a cash reserve account with an
initial deposit of approximately $3.8 million will be available to cover
losses.
Cash may be released to CFC if all of the following are satisfied: (1) OC
built through the turbo feature reaches at least 4.50 percent of the then
current pool balance, (2) the cash reserve account is equal to the required
amount, and (3) Class A-1 notes have been paid in full. Cash and or
receivables will be released to CFC in an amount such that the total OC
available to the transaction is equal to at least 4.50 percent of the then
current pool balance. The cumulative total of cash and receivables that CFC
may receive through this feature is limited to an amount equal to the initial
OC in the transaction, or 4.00 percent of the initial security balance. Once
CFC has received this amount, no further amounts will be released to CFC and
all collections will be paid to the securities which will cause OC to grow
again.
Duff & Phelps Credit Rating Co. (DCR) is a leading global rating agency
with 32 local market offices providing ratings and research on debt issues and
insurance claims paying ability in more than 50 countries. For additional
research on Premier Auto Trust 1999-3, visit DCR's web site at
http://www.dcrco.com (Quick Search: Premier). DCR's research is also
available on Bloomberg at DCR and First Call's BondCall Direct/Research
Direct at http://www.firstcall.com, as well as through other third-party
providers