DaimlerChrysler, which came to market with its DaimlerChrysler Auto Trust 2006-A last week, was the first major auto ABS issuer to have a deal carrying ratings from Fitch Ratings and only one other rating agency, in this case Standard & Poor's.
Although the trend of having a Fitch rating on deals plus either S&P or Moody's Investors Service started in the real estate ABS sector, it is now gaining acceptance in other asset classes as well.
"We have anticipated for a long time the market was headed in this direction " said Kevin Duignan, head of the asset-backed group at Fitch. "It is already common practice in mortgage-related residential and commercial deals and we anticipated that it would become more common in some of the other ABS sectors, including autos, student loans and equipment ABS."
Duignan explained that this shift in the market was a result of investors wanting to have more options open to them. More important is that the two-ratings approach is a direct result of a change in the major indices - such as that of Lehman Brothers, Merrill Lynch and Bank of America - made last year that included Fitch in these indices, driving ABS investors to change their investment guidelines.
(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.