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Fitch Affirms GMAC Auto Loan, Lease & Dealer Floorplan Transactions

Business Wire, May 26, 2005

NEW YORK -- Fitch affirms the ratings of the GMAC's retail auto loan, lease and dealer floorplan asset backed securities (ABS). While Fitch downgraded the corporate ratings of General Motors and GMAC to 'BB+' from 'BBB-' on May 24, 2005, it is not anticipated that these changes will have a material effect on the performance of GMAC's auto related ABS in the near term

This affirmation affects approximately $10 billion of Fitch rated retail auto loan transactions issued through various Capital Auto Receivables Auto Trusts (CARAT), approximately $9 billion of Fitch rated dealer floorplan ABS issued through various Superior Wholesale Inventory Finance Trusts (SWIFT) and a $1.9 billion Fitch rated retail lease transaction issued in April 2005. Affected securities are listed at the end of this release.

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While financial pressures have increased for both GM and GMAC, the ABS affirmations are based on the high quality of the underlying receivables, available credit enhancement, the transactions' legal and cash flow structures, GMAC's servicing capabilities and collateral performance trends in each of GMAC's auto loan and lease portfolios. The corporate downgrades reflect the continuing decline in GM's North American sales of key mid-size and large SUV products, increasing product and price competition in the large pickup market, and the impact of these two segments on consolidated profitability. Fitch's Corporate Group believes that declining volumes and profitability, paired with lack of tangible progress in attacking manufacturing and legacy costs will result in negative cash flow through at least 2006. The lowering of GMAC's long- and short-term ratings reflect the strong linkages between GM and GMAC. GM and GMAC's ratings remain on Outlook Negative.

As non-investment grade entities, GM and GMAC will likely experience additional financial and operational pressures that may influence future collateral performance. Fitch recognizes the link between seller/servicer financial and operational condition and the collateral performance of ABS and treats it as a risk factor when evaluating credit enhancement and assigning ratings. Key risk factors in retail auto loan and lease ABS differ from corporate risk factors and primarily center on consumer credit risk, residual value risk and wholesale market conditions. Dealer floorplan transactions, however, are more exposed to the risks that resulted in negative credit migration at the corporate level most notably declining vehicle sales and net pricing.

For loan and lease backed transactions, the near- to mid-term effect on collateral performance is considered to be well within the scenarios contemplated in assigning ratings, particularly given the strong credit quality and low level of defaults, losses and performance volatility. Longer term, a significant deterioration in servicing quality or a rapid, severe decline in wholesale values and a corresponding increase in loss severity, while also considered in the initial rating process, are more difficult to quantify and are being monitored closely.

Financial and operational pressures will likely influence GMAC's dealer floorplan transactions more visibly given the dealer, manufacturer and finance company relationship. Performance of dealer floorplan transactions is dependent, to a certain degree, on the ability and willingness of GM to support vehicle sales and its dealer network through incentives and financing. Decreased sales are contemplated through structural enhancements, like early amortization events tied to dealer repayment rates and a reserve step up mechanism. Payment rates are influenced by consumer demand for GM vehicles since dealers typically repay a loan upon sale of the financed vehicle. As sales have slowed, SWIFT payment rates have been affected and are being closely monitored.

GMAC's SWIFT dealer floorplan transactions have exhibited strong performance over the past several years. Losses have been very low and dealers are near historical peaks in terms of financial strength. Fitch is comfortable that conservative stress scenarios and credit enhancement considered at the time the transactions were rated continue to adequately protect investors at the corresponding rating levels.

Fitch's Structured Finance teams will continue to work closely with both the Corporate and Financial Institutions analysts to monitor the status of developments at the corporate level and to consider how ABS performance is influenced by these developments.

Fitch affirms the current ratings assigned to all the securities listed below:

Retail Auto Loan ABS:

Capital Auto Receivables Asset Trusts (CARAT):

Series 2002-2

-- Class A-4 notes 'AAA';

-- Certificates 'AAA'.

Series 2002-3

-- Class A-3 notes 'AAA';

-- Class A-4 notes 'AAA';

-- Certificates 'AA+'.

Series 2002-4

-- Class A-4 notes 'AAA';

-- Certificates 'AA+'.

Series 2002-5

-- Class A-4 notes 'AAA';

-- Certificates 'AA+'.

Series 2003-1

-- Class A3-A notes 'AAA';

Business Services Industry

Fitch Affirms GMAC Auto Loan, Lease & Dealer Floorplan Transactions

Business Wire, May 26, 2005

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