Ally Bank has returned to sponsor another securitization of payments on prime auto loans, this time raising $1 billion.
Slated to close by mid-March, the Ally Auto Receivables Trust 2024-1 will sell $1.1 billion to investors through seven tranches of class A, B, C and D fixed-rate notes, according to the trust's Securities and Exchange Commission filing on the deal. Ally Auto Assets, an LLC, will retain the 5% piece of each tranche of notes.
The A1 tranche notes have a weighted average (WA) life, in years, of 0.45, according to the SEC filing. In cases where subsequent tranches of notes will issue their maximum principal balance, the A2 and A3 tranches have a WA life, in years, of 1.73 and 3.26, respectively. For tranches A3 and A4, the WA life to maturity is an expected 3.39 and 4.76 years, respectively.
As for the more subordinate notes in the capital structure, classes B, C and D have WA lives of 5.13, 5.31 and 5.45, respectively, the SEC filing says.
Barclays, Citigroup Global Markets and Deutsche Bank Securities are all managers on the AART 2024-1, according to Asset Securitization Report's deal database. Co-managers include CastleOak Securities, Drexel Hamilton and Ramirez & Co., the database said.
All of the notes are benchmarked to the three-month interpolated yield curve, according to the ASR database. Spreads are expected to come in ranging from 15 basis points over the 3M I-Curve on the A1 notes to 160 bps over the benchmark on the class D notes.
AART 2024-1's SEC filing also detailed several forms of credit enhancement and liquidity, including a reserve account with an initial deposit of $2.8 million and overcollateralization amounting to about $5 million, cash reserves and subordination.
Among the 59,162 contracts in the pool, they have an average financed amount of $18,964, as of the February 1 cutoff date, the SEC filing said. Taking a deeper look into the assets' characteristics, they have a WA original term of 70.9 months, a WA annual percentage rate of 9.62% and borrowers had a WA average FICO score of 734, the SEC said.
A minority of the pool, 40%, are new vehicles. Since that leaves a majority of used vehicles, it wouldn't be surprising if the longer-term residual values of the used cars might came under scrutiny by rating agencies.
Fitch Ratings expects to assign ratings of F1+ to the A1 notes; AAA to the A2 through A4 notes; AA+ to the B notes; A+ to the C notes and BBB+ to the D notes. S&P Global Ratings assigns preliminary ratings of A-1+ to the A1 notes; AAA to the A2 through A4 notes; AA+ to the B notes; AA to the C notes and A+ to the D notes.
