Ally Financial plans to issue $700 million of bonds backed by near-prime auto loans.
Near prime loans are defined as those to borrowers with FICO scores between 601 and 660. This deal, called Capital Auto Receivables Asset Trust 2015-4, has a collateral pool with a weighted average (WA) FICO score of 630.
Loans are for new and used automobile and light-truck loans originated by Ally Financial pursuant to agreements with General Motors and Chrysler Group dealers. The loans have a WA loan to value ratio of 104.7% and loans with an original term of 60 plus month make up 76.7% of the pool. Most of the loans (60%) finance new vehicles.
Standard & Poor's assigned a preliminary 'AAA' rating to four tranches of class A notes that benefit from credit enhancement of 23.7%; the class B notes are rated 'AA' and benefit from credit enhancement of 19.4%; the class C notes are rated 'A' and benefit from credit enhancement of 15.1%; the class D notes are rated 'BBB' and benefit from credit enhancement of 11.4%; and the class E notes are rated 'BB-' and benefit from credit enhancement of 7.9%.
Deutsche Bank, Barclays, Credit Suisse and RBC Capita Markets are the lead underwriters.
The CARAT platform has been in existence for two years. Ally, formerly known as General Motors Acceptance Corp. (GMAC), relaunched the program in January 2013. As of June 30, 2015, Ally Financial Inc.'s U.S. auto serviced portfolio had 1.786 million retail contracts outstanding
The collateral pool backing CARAT 2015-4 looks similar to the issuer's previous transaction CARAT 2015-3 issued last August.