Fitch Downgrades AmeriCredit Corp.'s IDR to 'B+'; Ratings on Watch Negative

2008-08-06 23:49:06 -

- Fitch Ratings has downgraded the long-term Issuer Default Rating (IDR) of AmeriCredit Corp. (NYSE: ACF) to 'B+' and placed all ratings on Rating Watch Negative. Approximately $950 million of debt is affected by this action.

Fitch has taken the following rating actions:

AmeriCredit Corp.

-- Long-term Issuer Default Rating (IDR) downgraded to 'B+' from 'BB';

-- Senior debt downgraded to 'B+/RR4' from 'BB'.

The downgrade reflects today's announcement that Financial Security Assurance (FSA) would no longer be providing insurance for structured products. ACF issued $750 million in AMCAR notes in May 2008 with an FSA wrap. Without the availability of structured bond insurance, ACF would need to rely on senior/subordinate structures for long-term portfolio funding, which, given current market conditions, would be very expensive and may lack sufficient investor interest. While ACF has a commitment from Deutsche Bank AG (Deutsche), whereby the bank will purchase $2 billion in 'AAA'-rated asset-backed securities in registered public offerings, ACF would need to attract investors for the lower-rated tranches or retain them themselves, which would require a significant capital commitment. Should investor appetite fall short of expectations, Fitch believes ACF would need to reduce origination volumes further, which would negatively impact future profitability.

The Rating Watch Negative reflects uncertainty relating to ACF's near-term funding plan. The resolution of the Rating Watch will be dependent upon the company's ability to secure viable longer-term funding options while maintaining adequate levels of liquidity and risk-adjusted capitalization.

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
Meghan Crowe, CFA, 212-908-9121, New York
Peter J. Shimkus, 312-368-2063, Chicago
or
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