DBRS Rates Long Beach Acceptance Auto Receivables Tr 2005-B

Dominion Bond Rating Service (“DBRS”) has rated the Long Beach Acceptance Auto Receivables Trust 2005-B transaction as noted above.

The following factors were considered in arriving at the respective ratings:
(1) AAA credit enhancement is provided by an insurance policy from Financial Security Assurance Inc. (“FSA”). DBRS views the claims-paying ability of FSA as commensurate with that of an AAA-rated insurer. The insurance policy applies to the entire US$350,000,000 Class A bond and covers timely payment of interest, “parity deficit amount” on each distribution date, and ultimate payment of principal on the final scheduled payment date.
(2) The transaction can withstand multiples of base case cumulative net losses without a draw on the FSA policy. These multiples are higher than those historically experienced on Long Beach Acceptance Corporation’s (“LBAC”) portfolio.
(3) Transaction risk to FSA is investment grade.
(4) Changes in underwriting standards which contribute to relatively stronger obligor credit quality.
(5) Higher concentration of new vehicles (51%) relative to the LBAC 2005 A transaction.
(6) Risks associated with pre-funding 25% of the receivables pool. About 25% of the initial note proceeds will be invested in cash equivalents during the pre-funding period, which ends January 11, 2006. The credit risk and yield of the receivable pool could change as additional receivables are subsequently transferred to the trust.
(7) Long-term contracts (original terms greater than 59 months) account for 96% of the aggregate principal balance while receivables with original terms of 72 months account for 71% of the initial pool balance. Loans with longer terms are more risky, especially since automobiles are depreciating assets. Longer-term receivables secured by depreciating assets may experience higher loss severities relative to shorter-term receivables.
(8) Loans to finance used vehicles comprise 49% of the aggregate pool. Recovery values of repossessed vehicles, especially older used vehicles, may vary with economic conditions as well as market conditions.