Fitch Places Metris Master Trust Sub Classes on Rating Watch Positive

Business Wire, August 5, 2005

NEW YORK -- Fitch Ratings has placed several subordinate classes of asset-backed securities/notes in the Metris Master Trust on Rating Watch Positive. A complete list of ratings is available at the end of this release. This action follows the announcement on Aug. 4, 2005, that HSBC Finance Corporation (HSBC) will acquire Metris Companies Inc. (Metris) in an all-cash transaction. Upon that announcement, Fitch placed Metris' 'B-' senior debt on Rating Watch Positive and affirmed HSBC's 'AA-' rated unsecured debt. For additional information on the corporate ratings please refer to the Fitch release titled 'Fitch Ratings Affirms HSBC Finance; Places Metris On Rating Watch Positive' dated Aug. 4, 2005.

Given the improved financial condition upon completion of the acquisition, Fitch expects Metris' ability to continue funding new purchases going forward will be significantly enhanced. As a result, Fitch's purchase rate assumption will be modified when evaluating credit enhancement. Under the revised assumption, Fitch expects existing available credit enhancement to more than adequately cover shortfalls during an early amortization scenario. The results could enable rating upgrades on the subordinate classes of one notch or more. Fitch anticipates resolving the Rating Watch status upon completion of the acquisition.

Fitch believes that HSBC's acquisition of Metris complements HSBC's existing credit card business by providing additional scale in the rapidly consolidating U.S. credit card segment. Moreover, Fitch believes the continuing improvement in the Metris credit card portfolio mitigates concerns surrounding the relative difference between Metris and HSBC Finance's general purpose credit cards. For Metris, the acquisition addresses the company's relative funding disadvantage as well as the intensifying competitive environment for credit card issuers. HSBC may also realize ancillary benefits such as additional cross-sell opportunities with the addition of the Metris customer base.

Rating Actions

The following ratings are placed on Rating Watch Positive:

Metris Master Trust, floating-rate asset-backed securities, series 2005-1

--$63.30 million class M floating-rate asset-backed securities, series 2005-1 at 'AA';

--$75.90 million class B floating-rate asset-backed securities, series 2005-1 at 'A';

--$82.30 million floating-rate secured notes, class C at 'BBB';

--$44.35 million floating-rate secured notes, class D at 'BB '.

Metris Master Trust, floating-rate asset-backed securities, series 2004-2

--$75.40 million class M floating-rate asset-backed securities, series 2004-2 at 'AA';

--$83.00 million class B floating-rate asset-backed securities, series 2004-2 at 'A';

--$105.80 million floating-rate secured notes, class C at 'BBB'.

Metris Master Trust, floating-rate asset-backed securities, series 2001-2

--$559.39 million class A floating-rate asset-backed securities, series 2001-2 at 'A-';

--$99.45 million class B floating-rate asset-backed securities, series 2001-2 at 'BBB'.

Metris Master Trust, floating-rate asset-backed securities, series 2000-3

--$372.93 million class A floating-rate asset-backed securities, series 2000-3 at 'A-';

--$66.30 million class B floating-rate asset-backed securities, series 2000-3 at 'BBB'.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.