Fitch Upgrades 3 & Affirms 11 Classes from 4 Associates Manufactured Housing Transactions

Business Wire, Sept 29, 2006

NEW YORK -- Fitch Ratings has taken rating action on the following Associates Manufactured Housing Contract Trust pass-through certificates:

Series 1996-1:

--Class A-5 affirmed at 'AAA';

--Class M is upgraded to 'AA ' from 'AA';

--Class B-1 affirmed at 'AA ';

--Class B-2 affirmed at 'AA '.

Series 1996-2:

--Class M upgraded to 'AA ' from 'AA';

--Class B-1 affirmed at 'BBB';

--Class B-2 affirmed at 'CC/DR3'.

Series 1997-1:

--Class M upgraded to 'AA ' from 'AA';

--Class B-1 affirmed at 'AA ';

--Class B-2 affirmed at 'AA '.

Series 1997-2:

--Class A-6 affirmed at 'AAA';

--Class M affirmed at 'AA';

--Class B-1 affirmed at 'AA ';

--Class B-2 affirmed at 'AA '.

The upgrades, affecting approximately $115 million of the outstanding balances, are taken as a result of increased credit support levels. The affirmations, affecting approximately $276 million of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. The ratings on classes B-1 and B-2 of series 1996-1, 1997-1, and 1997-2 are based on a limited guarantee from Associates First Capital Corporation (Associates), which completed a merger with Citigroup, Inc. (Citigroup) in November of 2000. The ratings on the limited guarantee bonds reflect Fitch's 'AA ' corporate rating of Citigroup.

The collateral supporting the above transactions consists of fixed-rate contracts secured by manufactured homes. All of the contracts were either originated or purchased by Associates and were originally serviced by Associates. In addition, all of the above transactions are structured to pay interest to the subordinate classes before paying principal to the senior classes (II-PP structure).

As of the September remittance date, the respective pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) for series 1996-1, 1996-2, 1997-1, and 1997-2 are 17%, 15%, 17%, and 25% and the respective seasoning is 120, 118, 114, and 108 months. The respective cumulative losses (as a percent of the original collateral balances) for series 1996-1, 1996-2, 1997-1, and 1997-2 are 12.4%, 10.3%, 11.8%, and 17.4%.

Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. For more information on Distressed Recovery ratings, see the full report ('Structured Finance Distressed Recovery Ratings'), which is available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.