Fitch: No Implications for U.S. ABCP Conduits Despite Actions on AIG & Morgan Stanley/Discover

Business Wire, May 2, 2005

NEW YORK -- Recent negative rating actions by Fitch Ratings on American International Group, Morgan Stanley and Discover Bank had no adverse credit consequences for Fitch's rated universe of U.S. asset-backed commercial paper conduits despite over $8 billion in total exposure, according to Fitch Ratings in the latest edition of the 'ABCP Trends & Advances'.

'Fitch's ABCP S.M.A.R.T. surveillance database indicated that 13 Fitch-rated ABCP conduits had a total of $2.2 billion of exposure to AIG. However, Fitch's downgrade of AIG from 'AAA' to 'AA ' on March 15 did not adversely affect the credit risk profile of the affected conduits given the affirmation of AIG's 'F1 ' short-term rating,' said Darryl Osojnak, Senior Director, Fitch Ratings. 'Similarly, Fitch's April 11 placement of Morgan Stanley and Discover Bank on Rating Watch Negative had no adverse rating repercussions despite almost $6 billion of exposure across 49 Fitch-rated ABCP programs since the collateral in these programs is still performing well.'

Fitch will continue to monitor all future developments with respect to Morgan Stanley, Discover Bank and AIG. 'ABCP Trends & Advances', Fitch's semi-annual look at topical issues and trends in today's ABCP market, is available on the Fitch Ratings web site at www.fitchratings.com.