Skip navigation
Newswire

CORRECTED - (OFFICIAL) TEXT-Moody's comments on rental car issuance

In NEW YORK item headlined, "TEXT-Moody's comments on rental car term issuance," please read in 2nd paragraph as "... Vanguard Car Rental U.S.A. Inc. ..." instead of "... Vanguard Rental Car U.S.A. Inc. ..." (Moody's correcting company name).

A corrected repetition follows:

(The following statement was released by the rating agency.)

NEW YORK, Jan 28 - Rental car term issuance could increase to about $4 billion in 2004, slightly above 2003's issuance of $3.625 billion. Volume predictions are based on the fleet purchase plans and expected refinancings of the existing market participants, Moody's Investors Service says in a recent report.

Moody's expects that Vanguard Car Rental U.S.A. Inc. (the entity which purchased the assets of Alamo/National out of bankruptcy) will be more active in the market in 2004 because of its need to replenish Alamo/National's fleet and renew financing arrangements. Analyst Rochelle Tarlowe, author of the report, anticipates that most of the issuance will be enhanced with the continuing participation of monoline insurers. Rental car fleet securitization volume remained steady in 2003, compared with 2002's $3.7 billion and the number of transactions increased from four to six. As in previous years, all the 2003 rental car fleet transactions were sold exclusively in the 144A market.

Investors incurred no losses in connection with a rental car transaction and no rating actions were taken. Ms. Tarlowe says that "although the rental car market has stabilized, uncertainty regarding used car values and the credit strength of the U.S. automobile manufacturers remains. Those factors, combined with new monoline insurers participating in the rental car market support the continued use of monoline insurers in 2004." "Leisure travel has resumed somewhat, but business travel still remains depressed in the aftermath of 9/11," says Tarlowe. "The ability of the rental car securitization market to prosper in the future depends on the ability of rental car companies to remain profitable in the post 9/11 environment," she says. Overall, Moody's sees an increased trend toward the use of manufacturer repurchase programs, which, in the case of the Vanguard transaction included the absorption of the residual value risk of the vehicles by the manufacturer, even in the event that Vanguard should seek bankruptcy court protection. The report is titled "2003 Review and 2004 Outlook Rental Car Asset-Backed Securities: On The Road Again." For additional information, please see www.moodys.com