Fitch: GM Ch. 11 Has Marginal Effect on GMAC U.S. Auto ABS

NEW YORK--(Business Wire)--
Today's announcement of General Motors Corp. (GM) filing for Chapter 11
bankruptcy protection is expected to have limited immediate ratings implications
on outstanding auto related ABS transactions issued by GMAC, according to Fitch
Ratings.

'The largest potential impact on transaction performance will likely result from
meaningful declines in retail and wholesale values on GM manufactured vehicles,'
said Senior Director Ravi Gupta. 'These declines may arise from potential
post-bankruptcy developments such as further declines in consumer demand for new
and used GM manufactured vehicles, brand reductions or eliminations, and
disorderly reductions in a large number of franchised dealers and their existing
vehicle inventories, among other factors.'

The U.S Government has made clear, however, its intention of supporting GM
through this bankruptcy. This support includes making funds available to ensure
continued manufacturing operations, a viable supplier base, retail and wholesale
financing capacity and certain dealer support. 'While its unclear if this
support will result in an expedited restructuring and exit from bankruptcy, it
may limit potential significant immediate asset performance deterioration,' said
Gupta.

Additionally, Fitch does not believe there is heightened potential for servicing
disruption for any outstanding ABS transaction. The GM filing is not expected to
have any immediate financial ramifications on GMAC, which is the primary
servicer for all transactions. GMAC, through separate ownership and significant
government support and funding, should be able to maintain operations and
ongoing capacity to effectively continue servicing the assets and fulfill all
its servicing obligations.

Fitch currently rates approximately $14.7 billion in outstanding auto loan ABS,
auto lease ABS and dealer floorplan ABS issued by GMAC and supported by
financings related to GM manufactured vehicles.

Auto loan ABS:

Potential declines in wholesale values of GM manufactured vehicles may impact
performance for GMAC issued auto loan ABS. While Fitch does not expect material
increases in borrower default frequency as a result of the filing, decreases in
wholesale values will result in lower recovery rates of future defaults,
ultimately resulting in higher lifetime net losses for each auto loan pool. It
appears, however, that GM, through support from the U.S. Government, will be
able to honor vehicle warranties and ensure availability of parts and services.
Additionally, GM has meaningfully reduced new vehicle production to better align
existing supply inventory with reduced demand. Both factors may serve to limit
overall negative impact to used vehicle values.

Fitch currently rates outstanding auto loan ABS transactions issued by GMAC
totaling approximately $3.4 billion in outstanding notes. Additionally, Fitch
rates one transaction issued by another sponsor that is supported largely by GM
vehicle-related loans sold by GMAC to the issuer. These transactions are listed
below:

Auto lease ABS:

Wholesale vehicle value declines could also have some near term implications on
lease-end residual value realizations. As both Chrysler and GM seek to reduce
their dealership bases, there is the potential that more vehicles will be forced
into the wholesale supply, impairing wholesale values for the overall market.

As in the case of auto loan ABS, Fitch does not anticipate material increases in
lessee default frequency for lease securitizations, although similar severity
implications may apply.

Considering the above, Fitch believes the primary risk of a GM bankruptcy filing
to lease securitizations is deterioration in near-term residual value
performance. If there were to be material weakness in residual realizations in
the next 6-to-12 months, 2006 and early 2007 vintage lease transactions would be
more exposed to this stress, given their heavy concentrations in near-term
residual value maturities. However, these transactions have generally built
significant loss protection to date, due to the non-declining nature of their
credit enhancement structures.

Currently, all rated GM lease securitizations as listed below can support base
case residual losses consistent with the worst historical experience. As such,
Fitch does not anticipate significant rating volatility in the event of a GM
bankruptcy. However, if residual value deterioration is worse than expected in
the near-term or protracted, impairing transactions' ability to build credit
enhancement, rating actions may be necessary.

Dealer floorplan ABS:

Fitch expects the GM filing to have a negative effect on new vehicle sales
levels at existing dealers, weakening the financial profile of the franchised
dealer base and potentially increasing dealer bankruptcies. Furthermore, GM's
filing may accelerate the phase out of certain brands already indicted as part
of their overall restructuring plans, potentially putting respective dealers
under additional financial distress.

However, the targeted dealers generate a fairly small portion of GM's overall
new vehicle sales. Additionally, GM has indicated its intention to orderly
phase-out dealers through the year and support existing inventories. Given the
government's recent capital injection and potential funding capacity through its
bank subsidiary, GMAC should also be able to provide adequate financing to the
outstanding inventory of vehicles for GM dealers, at least on short term basis.
Should this occur, the overall negatively impact the dealer floorplan ABS may be
limited.

Fitch downgraded its outstanding GMAC related dealer floorplan ABS on April 14,
2009 and placed all transactions on Rating Watch Negative following continued
system-wide deterioration in the domestic auto industry and the bankruptcy risk
of GM. SWIFT X had previously entered amortization and is accumulating principal
pending its near-term maturity date while SWIFT XI will enter early amortization
due to a trigger event associated with a GM Ch. 11 filing. Should monthly
payments rates and losses not material deteriorate from current levels, both
transactions should repay full principal within the next few months. SWIFT
2007-AE1 and SMART, while structured with significantly more credit enhancement
than the previous SWIFT transactions, do not contain a similar trigger event and
will continue to revolve in accordance with their transaction documents.

Fitch will be monitoring developments surrounding GM's bankruptcy and how they
may affect the following ABS transactions:

Auto loan ABS:

Capital Auto Receivables Asset Trust

Series 2004-2

--Class C;

--Class D.

Series 2005-CPA

--Class A.

Series 2006-1

--Class A;

--Class B;

--Class C;

--Class D.

Series 2007-1

--Class A;

--Class B;

--Class C;

--Class D.

Series 2007-3

--Class A;

--Class B;

--Class C;

--Class D.

Series 2007-4

--Class A;

--Class B;

--Class C;

--Class D.

Series 2008-CPA

--Class A.

Series 2008-CPB

--Class A.

Bank of America Auto Trust

Series 2008-1

--Class A;

--Class B;

--Class C;

--Class D;

--Class E;

--Class F;

--Class G;

--Class H;

--Class I;

--Class J.

Auto lease ABS:

Capital Auto Receivables Asset Trust

Series 2006-SN1

--Class A-4a;

--Class A-4b;

--Class B;

--Class C;

--Class D.

Series 2006-SND1a

--Class A;

--Class B;

--Class C.

Series 2007-SN1

--Class A-3a;

--Class A-3b;

--Class A-4;

--Class B;

--Class C;

--Class D.

Series 2007-SNE

--Class A.

Series 2007-SNG

--Class A.

Series 2008-SNA

--Class A.

Series 2008-SNB

--Class A.

Series 2008-SND

--Class A.

2008-SNE

--Class A.

Series 2008-SNF

--Class A.

Series 2008-SNH

--Class A.

Dealer Floorplan:

Superior Wholesale Inventory Financing Trust (SWIFT)

(SWIFT X) Series 2004-A

--Class A;

--Class B;

--Class C.

(SWIFT XI) Series 2005-A

--Class A;

--Class B;

--Class C;

--Class D.

(SWIFT 2007-AE-1)

--Class A;

--Class B;

--Class C;

--Class D.

SWIFT Master Auto Receivables Trust (SMART)

Series 2007-2

--Class A;

--Class B;

--Class C;

--Class D.

As Fitch continues to closely monitor the performance of the transactions, it
will take further rating actions as deemed necessary.

Fitch's rating definitions and the terms of use 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.

Fitch Ratings
Ravi Gupta, 312-368-2058, Chicago
Hylton Heard, 212-908-0214, New York
John Bella, Jr., 212-908-0243, New York
or
Media Relations:
Sandro Scenga, 212-908-0278, New York
Email: sandro.scenga@fitchratings.com

Copyright Business Wire 2009