Fitch Downgrades EMAC Franchise Loan Classes

Fourteen classes from three EMAC Owner Trust franchise loan transactions have been downgraded by Fitch Ratings.The downgrades in series 1998-1 were as follows: classes A and IO, from BBB to B; class B, from BB to CCC; class C, from B to CC; and class D, from CCC to C. Classes A through C remain on Rating Watch Negative. In series 1999-1, classes A and IO were downgraded from BB to CCC, class B from B to CCC, class C from CCC to CC, and class D from CC to C. Classes A and B remain on Rating Watch Negative. In series 2000-1, classes A and IO were downgraded from BB to B, class B from B to CCC, and class C from CCC to CC. Classes A, IO, and B remain on Rating Watch Negative, and the ratings on classes D and E were affirmed. Fitch attributed the downgrades to the deterioration of the collateral performance of the pools. In series 1998-1, 32% of the collateral is delinquent greater than 90 days or defaulted, and the comparable figure for series 2000-1 is 30%. In series 1999-1 -- "by far the most impaired of any of the EMAC deals," Fitch said -- cumulative defaults stand at 65% of the initial pool. Fitch can be found online at http://www.fitchratings.com.