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Affinity 001 plc (30AG)


Thursday 08 September, 2005

Affinity 001 plc

Announcment re policy

Affinity 001 plc
08 September 2005

HSBC has adopted a more conservative accounting policy in respect of insolvent
borrowers, and those entering into an IVA for all of HFC's credit card accounts,
whether securitised or not.  These balances are now written off as soon as
notification is received, whereas they previously proceeded through the normal
arrears process, with the write off occurring at 180 days.   As a result there
has been an unusually large number of write offs in July, as all of the relevant
accounts previously within the arrears process were charged off in a single
block.  We believe that this has the effect of ultimately strengthening the
Affinity transaction.  It improves the average quality of the eligible
collateral pool and also triggers the retention of excess spread within the
transaction as it becomes available.

If any investor has any questions with regard to the above, please contact
Dominic Swan on 0207 991 1711.

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