As previously reported (ASR 1/21/02 p. 6), Household Finance has taken the first step in beefing up its reliance on securitization as a funding alternative. Last week's offering of $1 billion of home-equity paper was the first of what is expected to be up to $4.5 billion of real estate supply from Household in 2002.

Following a previously anticipated downgrade to single-A, from single-A-plus, Fitch kept the finance conglomerate's outlook on negative watch, citing HFC's "relatively low levels of real estate securitization." Despite Fitch's concerns, both Moody's Investors Service and Standard & Poor's rate HFC comparably, A2/A, respectively, both with a stable outlook.

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