Ally Financial is marketing a $777 million securitization of non-prime auto loans.
The deal, Capital Auto Receivables Asset Trust 2014-2 has been assigned preliminary ratings by Moody’s Investors Service. Moody’s expects to assign an 'Aaa' rating to $642.2 million of class A notes; an 'Aa1' rating to $38.10 million of class B notes; a 'Aa3' rating to $36 million of class C notes; and 'Baa1' rating to $32 million of class D notes. The ratings agency will not rate the class E notes.
Bank of America Merrill Lynch, Deutsche Bank and JP Morgan are the lead underwriters.
CARAT 2014-1 is Ally’s sixth public transaction under the CARAT program since the financial crisis.
Keeping in line with the previous securitization issued under CARAT, the latest deal features a one-year revolving period during which proceeds from loan payments may be directed to the purchase of new loans to add to the collateral pool.
CARAT 2014-2 has a loan-to-value ratio of 107%, higher than that of any of the previous five CARAT transactions closed since 2013, according to the presale report. CARAT 2014-1, for example, had an LTV of 106%.
In the latest deal, 72.6% of the initial loan pool balance are loans with original terms greater than 60 months. This is lower than the initial concentation in the previous five CARAT transactions, which ranged from 77% - 80%
The concentration of used vehicles in CARAT 2014-2 is 39.92%, which is near the prior 2014 transaction, and higher than the recently issued 2013 CARAT transactions. The weighted average FICO of the used vehicle portion of the pool is 631.