NEW YORK, Feb. 6 /PRNewswire/ -- Standard & Poor's today lowered its
ratings on 15 mezzanine and subordinated classes of various Conseco Finance
Corp-related transactions issued in 1999 by Manufactured Housing Senior/Sub
Pass-Thru Trust and Manufactured Housing Contract Senior/Sub Pass-Thru Trust
and removed them from CreditWatch negative, where they were placed on Jan. 14,
2002. Concurrently, the ratings on the class A and M-1 certificates of
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-1, 1999-2, and 1999-3 are
affirmed and removed from CreditWatch negative, where they were placed on
Jan. 14, 2002. Additionally, the class A certificates of Manufactured Housing
Senior/Sub Pass-Thru Trust 1999-4, 1999-5, and 1999-6 remain on CreditWatch
with negative implications, where they were placed on Jan. 14, 2002 (see
list). The subordinated B-2 classes of all six series remain on CreditWatch
with negative implications, where they were placed on Dec. 11, 2001.
The lowered ratings reflect the worse-than-expected performance of the
underlying pools of manufactured housing contracts and the resulting
deterioration of credit enhancement, with series issued in the later portion
of 1999 (series 1999-4, 1999-5, and 1999-6) displaying greater signs of stress
relative to series issued earlier in the 1999 vintage year (series 1999-1,
1999-2, and 1999-3). With pool factors ranging from 77% to 83%, the 1999
vintage transactions display cumulative net loss rates between 2.54% and 3.18%
of the respective original pool balances. Also, repossession inventory, as a
percentage of the current pool balance, is significant for all six
transactions, ranging between 2.8% and 4.8%. In addition, recovery rates on
liquidated collateral have been relatively low at an average rate of 40% for
the last 12 months. All six transactions are in their peak loss period, which
typically ranges between 24 to 48 months of performance for manufactured
housing loans.
Furthermore, monthly excess spread for all transactions has been
insufficient to cover monthly net losses, thereby depleting the credit
enhancement, which is available to cover future losses. For example, high
losses have caused overcollateralization to decline below the target levels
established for the Manufactured Housing Senior/Sub Pass-Thru Trust 1999-2 and
Manufactured Housing Contract Senior/Sub Pass-Thru Trust series 1999-6
transactions. Additionally, the high level of monthly losses has resulted in
the principal write down of the subordinated B-2 classes for the remaining
Manufactured Housing Senior/Sub Pass-Thru Trusts series. The future
liquidation of repossession inventory in conjunction with low recovery rates
is expected to further affect the credit enhancement levels negatively.
The long-term rating of Conseco Finance Corp., which provides a guarantee
for the B-2 classes, was placed on CreditWatch with negative implications on
Dec. 11, 2001. Consequently, the ratings assigned to the B-2 classes, which
are dependent on Conseco's rating, were placed on CreditWatch with negative
implications where they remain.
Standard & Poor's will continue to monitor the performance of the
aforementioned transactions closely.
RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-1
Class Rating
To From
M-2 A- A/Watch Neg
B-1 BBB- BBB+/Watch Neg
Manufactured Housing Senior/Sub Pass-thru Trust 1999-2
Class Rating
To From
M-2 A- A/Watch Neg
B-1 BBB- BBB+/Watch Neg
Manufactured Housing Senior/Sub Pass-thru Trust 1999-3
Class Rating
To From
M-2 A- A/Watch Neg
B-1 BBB- BBB+/Watch Neg
Manufactured Housing Senior/Sub Pass-thru Trust 1999-4
Class Rating
To From
M-1 AA- AA/Watch Neg
M-2 BBB+ A/Watch Neg
B-1 BBB- BBB/Watch Neg
Manufactured Housing Senior/Sub Pass Thru Trust 1999-5
Class Rating
To From
M-1 AA- AA/Watch Neg
M-2 BBB+ A/Watch Neg
B-1 BBB- BBB/Watch Neg
Manufactured Housing Contract Senior/Sub Pass-Thru Tr 1999-6
Class Rating
To From
M-1 AA- AA/Watch Neg
M-2 BBB+ A/Watch Neg
B-1 BBB- BBB+/Watch Neg
RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE
Manufactured Housing Senior/Sub Pass-thru Trust 1999-1
Class Rating
To From
A-3 AAA AAA/Watch Neg
A-4 AAA AAA/Watch Neg
A-5 AAA AAA/Watch Neg
A-6 AAA AAA/Watch Neg
A-7 AAA AAA/Watch Neg
M-1 AA AA/Watch Neg
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-2
Class Rating
To From
A-2 AAA AAA/Watch Neg
A-3 AAA AAA/Watch Neg
A-4 AAA AAA/Watch Neg
A-5 AAA AAA/Watch Neg
A-6 AAA AAA/Watch Neg
A-7 AAA AAA/Watch Neg
M-1 AA AA/Watch Neg
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-3
Class Rating
To From
A-3 AAA AAA/Watch Neg
A-4 AAA AAA/Watch Neg
A-5 AAA AAA/Watch Neg
A-6 AAA AAA/Watch Neg
A-7 AAA AAA/Watch Neg
A-8 AAA AAA/Watch Neg
A-9 AAA AAA/Watch Neg
M-1 AA AA/Watch Neg
RATINGS AFFIRMED AND REMAIN ON CREDITWATCH NEGATIVE
Manufactured Housing Senior/Sub Pass-thru Trust 1999-4
Class Rating
A-3 AAA/Watch Neg
A-4 AAA/Watch Neg
A-5 AAA/Watch Neg
A-6 AAA/Watch Neg
A-7 AAA/Watch Neg
A-8 AAA/Watch Neg
A-9 AAA/Watch Neg
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-5
Class Rating
A-2 AAA/Watch Neg
A-3 AAA/Watch Neg
A-4 AAA/Watch Neg
A-5 AAA/Watch Neg
A-6 AAA/Watch Neg
Manufactured Housing Contract Senior/Sub Pass-Thru Tr 1999-6
Class Rating
A-1 AAA/Watch Neg
SOURCE Standard & Poor's
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Related links:
http://www.standardandpoors.com/ratings
CONTACT:
Patrick Coyne, +1-212-438-2435, Christopher
Conroy, +1-212-438-2432, Jack London, +1-212-438-1461, Kelly Luo,
+1-212-438-2535, all of Standard & Poor's
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