THIS JUST IN! MOODY'S GIVES JAYHAWK AN A-OK!
Two Jayhawk Acceptance Deals Ratings Confirmed By Moody's
Dow Jones News Service ~ February 10, 1997 ~ 6:03 pm EST
(MORE) DOW JONES NEWS 02-10-97
6:02 PM
Jayhawk/Moody's -2: Subprime Auto Loans Perform As
Expected
NEW YORK (Dow Jones)--Moody's Investors Service confirmed the ratings on
two series of notes issued from a trust created by Jayhawk Acceptance Corp.
(JACC).
The ratings are based on a financial guaranty policy issued by MBIA Insurance
Corp., whose financial strength rating from Moody's is Aaa, the rating agency said.
The complete list of rating actions is as follows:
Issuer: Jayhawk Funding Trust I
5.925% Automobile Loan-Backed Notes Series 1996-A
Rating Unchanged at Aaa
Issuer: Jayhawk Funding Trust I
6.64% Automobile Loan-Backed Notes, Series 1996-B
Class A: Rating Unchanged at Aaa
''On Friday, Jayhawk filed a voluntary petition for reorganization under Chapter 11
of the U.S. Bankruptcy Code. Last week, the company announced a fourth quarter
loss, which was attributable to a special charge of $15.5 million due to higher than
expected loan losses. As a result of the financial performance, Jayhawk violated a
financial covenant under one of its revolving credit agreements,'' Moody's said.
Despite the bankruptcy filing, the two securitizations of subprime auto loans are
performing within expectations according to Moody's Senior Analyst Kent G.
Becker.
The 1996-A notes have an outstanding principal balance of only $2.3 million out of
an original balance of $41.8 million, Moody's said. The 1996-B notes have a
current balance of $24.3 million and are supported by a pool of loans with a
balance of approximately $67 million, of which $37.4 million of principal consists of
current loans.
''However, the credit performance is highly variable, particularly if Jayhawk's
financial distress leads to reductions in collections and servicing staffing. Jayhawk is
aware of this risk and has stated their intent to bolster their collections staff,''
Moody's said.
(END) DOW JONES NEWS 02-10-97
6:22 PM
Company Symbols: JACC
Subject Codes: I/FIS N/BON N/DJN N/DJWI N/LAT N/RTG M/FIN P/DAR P/DBK P/DIS
R/NME R/TX R/US R/USS |
