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S&P Rates WFS Financial 1999-C Owner Trust 'AAA'

16 November 1999

S&P Rates WFS Financial 1999-C Owner Trust 'AAA'

    NEW YORK--Standard & Poor's--Nov. 15, 1999-- Standard & Poor's assigned its triple-'A' rating to WFS Financial 1999-C Owner Trust's US$447.5 million auto receivable-backed notes and US$52.5 million auto receivable-backed certificates (see list).
    The ratings are based primarily on:
    -- A 10.5% subordination for classes A-1 through A-3 provided by the certificates,
    -- A 7% spread account supporting the notes and the certificates,
    -- An annual excess spread of approximately 13.5%,
    -- A note policy and a certificate policy provided by Financial Security Assurance Inc. (FSA), and
    -- A sound legal structure.
    The spread account builds from 4% of the initial pool balance at closing, to a cap of 7% of the outstanding pool balance. After reaching the cap, the spread account may then amortize subject to a floor of 1.8% of the initial pool balance. The spread account, coupled with available excess spread and subordination, provides a sufficient multiple of cumulative expected losses for the designated ratings.
    As of Sept. 30, 1999, WFS had a US$5.152 billion auto receivables portfolio, which is a 21.32% increase from Sept. 30, 1998. As of Sept. 30, 1999, delinquencies fell to 2.54% compared with 3.34% at fiscal year-end 1998. Net losses of 2.01% for the nine-month period ended Sept. 30, 1999, decreased significantly from 3.34% for the corresponding period of 1998. The decrease in loss and delinquency levels in the nine-month period is due to a continued increase in the origination of prime contracts as well as the completion of WFS' restructuring efforts.
    The prime/non-prime product mix of WFS' portfolio has shifted from 56% prime/44% nonprime as of September 1998, to the current 70% prime/30% nonprime. The 1999-C securitized pool is composed of 67% prime contracts and 33% nonprime contracts. Similar to the past two securitizations, Standard & Poor's expects the 1999-C pool to experience cumulative net losses in the 5%-6% range.
    FSA has issued a note policy and a certificate policy. The note policy will unconditionally and irrevocably guarantee payment of scheduled payments (of both principal and interest) on the notes on each distribution date (Jan. 20, April 20, July 20, and Oct. 20). The notes, however, have been evaluated and rated on a stand-alone basis by Standard & Poor's without regard to this note policy. The certificate policy will unconditionally and irrevocably guarantee payment of guaranteed distributions payments (of both principal and interest) on the certificates on each distribution date.
    Approximately 25.4% of the aggregate principal balance of the receivables represents the financing of new vehicles; 74.6% represents the financing of used vehicles. The highest state concentrations are in California (40.3%), Texas (5.71%), Arizona (5.9%), and Washington (5.2%). The average contract balance is US$13,852, and the weighted average APR is 14.77%.
    WFS Financial Inc., the master servicer, is a majority owned operating subsidiary of Western Financial Bank, a federally chartered savings association. WFS Financial Auto Loans, Inc.., as seller, is a wholly owned, limited-purpose operating subsidiary of WFS Financial Inc. The seller will purchase the contracts from WFS Financial Inc., and then the trust will purchase the contracts from the seller, Standard & Poor's said.---CreditWire

     RATINGS ASSIGNED

Issue                                                 Rating
Class A-1 US$224 million 6.411%
     auto receivable-backed notes                     AAA
Class A-2 US$149 million 6.92%
     auto receivable-backed notes                     AAA
Class A-3 US$74 million 7.07%
     auto receivable-backed notes                     AAA
US$52 million 7.34% auto
     receivable-backed certificates                   AAA