S&P Lwrs Var Conseco Finance-Rel ABS Ratings to 'D'

Business Wire, March 11, 2003

Business Editors

NEW YORK--(BUSINESS WIRE)--March 11, 2003

Standard & Poor's Ratings Services today lowered its ratings on various corporate guaranteed B-2 classes of Conseco Finance Corp (Conseco)-related transactions to 'D' from 'CCC-'(see list). In addition, the ratings on all classes above B-2 from the transactions originated between 1995 and 2002 remain on CreditWatch with negative implications, where they were placed Oct. 21, 2002.

As reported in the February 2003 distribution reports, the subordinate B-2 certificateholders of the affected trusts experienced interest shortfalls for the second consecutive month, totaling $3,262,378. These interest shortfalls represent rating defaults on the basis that these transactions failed to pay timely interest to certificateholders. Additionally, without the guarantee payments deposited by Conseco, Standard & Poor's believes that B-2 interest shortfalls will continue to be prevalent in the future for all of the guaranteed certificates, given the adverse performance trends displayed by the underlying pools of collateral that secure these classes, as well as the location of B-2 interest at the bottom of the transaction payment priorities (after distributions of senior principal).

Conseco filed for Chapter 11 bankruptcy protection on Dec. 17, 2002 and began accepting bids for its possible acquisition soon thereafter. Additionally, based on a joint motion filed by Conseco and the trustee, U.S. Bank National Association, the court issued an interim order raising the servicing fee to 125 basis points (BPS) per annum from 50 bps per annum. The interim order also raised the priority of the servicing fee in the payment priority established for each manufactured housing deal. The auction of Conseco was held March 5, 2003, and resulted in the tentative split of the company into two parts, each of which will be acquired independently: Conseco's Mill Creek Bank will be acquired by GE Consumer Finance, a unit of the General Electric Co., for $310 million; and the rest of Conseco's finance unit (including the manufactured housing servicing platform) will be sold to CFN Investment Holdings LLC, a joint venture between Fortress Investment Group LLC, J.C. Flowers & Co. LLC, and Cereberus Capital Management L.P., for $700 million. The sale of Conseco and the resolution of the servicing fee requirement and priority for the manufactured housing securitization trusts are still pending bankruptcy court and bondholder approval.

On Oct. 21, 2002, the ratings on all manufactured housing classes (except the guaranteed B-2 classes, which were weak-linked to the rating of Conseco as guarantor) issued between 1995 and 2002 were placed on CreditWatch negative following Conseco's announcement that it would discontinue its conventional chattel paper financing business and focus on its land-home business while continuing to support chattel paper lending exclusively through the FHA Title I program. Subsequently, Conseco suspended all of its manufactured home financing and assumption programs on Nov. 25, 2002.

Standard & Poor's will continue to monitor the resolution of the Conseco bankruptcy closely and is in the process of completing a detailed review of the credit performance of the aforementioned transactions that are currently on CreditWatch relative to the remaining credit support in order to determine if any further rating actions are necessary.

RATINGS LOWERED

Green Tree Financial Corp. Manufactured Housing Trust

                        Rating
Series    Class       To      From
1995-2    B-2         D       CCC-
1995-3    B-2         D       CCC-
1995-4    B-2         D       CCC-
1995-5    B-2         D       CCC-
1995-6    B-2         D       CCC-
1995-7    B-2         D       CCC-
1995-8    B-2         D       CCC-
1995-9    B-2         D       CCC-
1995-10   B-2         D       CCC-
1996-1    B-2         D       CCC-
1996-2    B-2         D       CCC-
1996-7    B-2         D       CCC-
1996-10   B-2         D       CCC-
1997-4    B-2         D       CCC-

Copyright 2003, Standard & Poor's Ratings Services