Ally Financial has structured its third nonprime auto loan securitization of the year in a new $750 million asset-backed transaction with slightly enhanced credit quality over its previous deals.
Capital Auto Receivables Asset Trust 2016-3 is a collateralization of loan receivables totaling $769.23 million, from 47,995 loans to near-prime customers with weighted average FICO scores of 634.39 – a slight nudge up from Ally’s previous 13 securitizations, according to a presale report from Standard & Poor’s.
The portfolio includes four tranches of senior notes, including short-term money market bonds totaling $142 million that were granted a preliminary ‘A-1+’ structured finance rating from Standard & Poor’s on Wednesday.
S&P assigned early triple-A ratings on all the senior notes, which are comprised of the A-1notes, a $248 million slice of A-2 notes split between fixed- and floating-rate tranches, fixed-rate Class A-3 notes totaling $200 million and $71.54 million in fixed-rate Class A-4 bonds.
The A-2 notes split will be determined on the pricing date, with the floating rates to be capped at no more than $124 million.
S&P also affixed ratings to $88.46 million subordinate tranches ranging between ‘AA+’ and ‘BBB+’.
The Class A notes have 11.5% initial credit enhancement, which is also the target O/C. That is in line with Ally’s previous $991.28 million asset-backed transaction in March.
Loan to value of the underlying loans has dropped to 105.14% from 105.89%, and the average seasoning increased to 13.96 months from 12.88 months. The proportion of new-car loans increased from Ally’s two previous deals at 62.65%.
The underlying collateral is composed to loans to customers in the near-prime strata with average FICO scores of 634.39, paying average APRs of 9.68%.
Barclays, JPMorgan Securities and RBC Capital are underwriters on the deal.