Ally Financial plans to issue $508.21 million of securities backed by subprime auto receivables, according to a pre-sale report by Standard & Poor's.
The deal, Capital Auto Receivables Asset Trust 2013-2 (CARAT 2013-2), is backed by subprime, fixed-rate retail vehicle installment sales contracts that are secured by new and used vehicles indirectly originated by Ally.
Barclays is the lead underwriter on the transaction.
The A1-4 $422.41 million senior, fixed rate classes received preliminary ‘AAA’ ratings from S&P. The deal also features subordinate, fixed rate B, C, D, and E classes rated ‘AA’, ‘A’, ‘BBB’, and ‘BB’, respectively.
The deal will include a one-year revolving period during which additional receivables will be sold to the issuing entity, subject to certain eligibility criteria and concentration limits, according to S&P.
This transaction features a few structural and credit enhancement differences than the previous CARAT transaction, including: the addition of class E notes; decreased initial overcollateralization, 3.75% of initial aggregate receivables principal balance from 4.75% in Ally's previous CARAT deal; and decreased target overcollateralization, 5.25% of initial aggregate receivables principal balance from 6.25%.
Series 2013-2 also targets a slightly higher FICO score than Series 2013-1, with the weighted average score of the collateral pool at 631.3, an increase from 630.3.
The deal is expected to close June 26, 2013.