Series 1998-C had displayed a cumulative net loss rate of 2.15% of the original pool balance after 22 months, and series 1999-A turned in loss of 1.52%. In addition, both suffered from insufficient monthly excess spread, causing over-collateralization to slip further below the target level of 4.75%.
To support the original ratings, at Bombardier's request, letters of credit have been issued by Societe Generale SA for more than $16.6 million for the 1998-C deal and over $11.3 million for 1999-A. S&P believes this credit enhancement structure will allow the bonds to pay both principal and interest.
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