Fitch affirms AmeriCredit, revises outlook

Fitch Ratings affirmed the B rating for AmeriCredit Corp.'s senior unsecured debt and revised the rating outlook to stable from negative following the company's announcement of the renewal of its master warehouse facility.

Fitch's rating outlook revision to stable reflects the company's successful renegotiation of its warehouse credit facilities. In conjunction with the renewal of the facility, the warehouse covenant limiting the annualized managed net charge-off ratio below an average of 8.0% for two consecutive quarters was increased to 9.0%.

The increased covenant level provides greater cushion relative to the company's current annualized charge-off level. Fitch expects the company to maintain an adequate cushion relative to this covenant going forward. In addition to this change there were other modifications to the agreement that Fitch believes is consistent with the current rating and outlook.

Fitch's rating reflects the company's improved liquidity position, lengthening of the company's funding maturities, and expectation of asset quality improvement.

AmeriCredit's liquidity position has improved as unrestricted cash has increased to $358 million at Sept. 30 from $92 million at June 30, 2002.

Fitch expects the company to breach trigger levels in two securitizations over the next two months trapping the majority of cash distributions from FSA insured trusts for the remainder of the year. However, unrestricted cash is not expected to deviate materially from current levels, which should be sufficient to fund operations over the near term.

Asset quality is expected to improve over the next year as AmeriCredit's older portfolio liquidates and newer originations with higher underwriting criteria begin to season. Although still not fully seasoned, originations starting in late 2002 are performing better, based on cumulative charge-off data, than originations from previous years.

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