Ally Financial Inc. is marketing it $940 million subprime auto deal called Capital Auto Receivables Asset Trust 2013-1, bringing the January pipeline for auto ABS to $3.2 billion.
The deal is backed by a pool of fixed rate retail installment sale contracts and direct purchase money loans used to finance the purchase of new and used cars and light trucks, according to a preliminary deal prospectus the issuer filed today, with the U.S. Securities and Exchange Commission. Most of these retail installment sale contracts and direct purchase money loans are the obligations of non-prime credit quality obligors.
Moody's Investor Service has assigned preliminary ratings to the transaction. The capital structure includes $789.6 million of class A notes, rated 'Aaa'; $41.6 million of class B notes, rated 'Aa1'; $61.6 of class C notes, rated 'A1' and $46.8 of class D notes, rated 'Baa2'. The class B Notes, class C Notes and class D notes are expected to be retained by the issuer. BofA Merrill Lynch, Barclays Capital and Citigroup are lead underwriters on the deal.
Moody's that the transaction will be the first public transaction under the CARAT program and the first public transaction with a collateral pool consisting predominantly of non-prime loans.
Ally Financial, and its predecessor GMAC, have securitized auto loans since 1990. Public CARAT transactions prior to 2008 comprised the entirety of Ally Financial's collateral pool. Since 2009, Ally Financial has transferred a significant proportion of its prime originations to its Ally Bank subsidiary, which in turn has issued 17 public securitizations spanning 2009-12 under the Ally Auto Receivables Trust (AART) program.
"CARAT 2013-1 introduces a novel revolving structure whereby proceeds from loan payments during the first 12 months of the transaction may be directed to the purchase of new loans to add to the collateral pool," explained Moody's. "After 12 months, the transaction amortizes in a manner common to other auto loan transactions."
Ally’s deal follows Nissan’s $1 billion prime auto deal announced yesterday and Santander’s $1.25 billion subprime deal. Standard & Poor’s said it expected $105 billion of auto-related ABS in 2013, up from $99 billion in 2012.