The third round of government stimulus checks to consumers also gives a boost to GM Financial’s second blue chip auto loan securitization which is expected to end in April.
In captive auto lender finance’s upcoming deal – $ 1.32 billion GM Financial (GMF) Consumer Automobile Receivables Trust 2021-2 – Moody’s Investors Service has lowered its forecast of net credit losses for the deal to 1 , 15%, or 35 basis points, compared to those of the GMF. first offer of the year.
The decline in cumulative net loss projections from the previous deal “reflects the steady but uneven recovery in the macroeconomy,” according to a Moody’s pre-sale report released Wednesday. “In particular, American consumers have shown a remarkable degree of resilience, in part due to the large-scale government stimulus.”
Fitch Ratings calculated a forward-looking credit loss forecast on the deal of 1.55%, also down from the last two trades of 2020 rated by Fitch.
The pool consists of 43,130 contracts with borrowers with a weighted average FICO of 772, similar to recent ABS deals sponsored by GMF. The weighted average APR paid by borrowers is 4.35%.
About 85% of the loans are long-term contracts with an initial term of between 61 and 84 months, with seven months of seasoning. The 84-month loan share represents 8.55% of the collateral pool, an exposure that is “higher compared to previous GMCAR transactions,” Moody’s noted.
Trucks, SUVs and crossovers make up 90% of the concentration of vehicle types in the pool, and new vehicles make up 80.7% of the pool.
The transaction comprises four categories of senior notes and three subordinated tranches. The Category A-1 Money Market Account, totaling $ 230.2 million, enjoys the highest short-term ratings of each agency, P-1 (Moody’s) and F1 (Fitch). Each agency assigned a preliminary triple A rating to the remaining Class A term tranches totaling $ 1.01 billion.
Moody’s also assigned an Aaa to the Category B tranche of $ 21.2 million.
The deal is on the 17theon GMF’s Prime Lending Shelf (GMCAR). GMF also issues securitizations for lease contracts, dealer floor plan inventory pools as well as non-senior loans through its AmeriCredit Auto Receivables Trust platform.
TD Securities was the primary underwriter in the transaction.