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Moody's drops Triad Financial to Caa2
Moody's Investors Service said it confirmed the Caa2 senior unsecured rating of Triad Financial Corp. and lowered the corporate family rating by one notch to Caa2.
The outlook is stable.
The rating action reflects Moody's view that, with the company now effectively in run-off mode, unsecured bondholders are likely to receive a substantial - quite possibly full - recovery as the company services its existing portfolio, repays related term ABS debt and channels excess cash into the unrestricted cash account.
On the other hand, the agency said the ratings also reflect the high degree of risk associated with sub-prime auto finance, some risk of servicing platform degradation as the portfolio runs off and some degree of uncertainty regarding governance and control issues, particularly as it relates to the potential that Triad could use funds for purposes other than debt repayment.
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