Ally Bank priced $1.5 billion of bonds backed by prime auto loans, according to a regulatory filing.
Credit Suisse, Barclays and Bank of American Merrill Lynch are the lead underwriters on the deal.
Ally Auto Receivables Trust 2014-2 will issue a $324 million tranche of money market notes with a weighted average life (WAL) of 0.3 year that yields 0.20%. There are also three tranches of fixed-rate notes with preliminary AAA’/ Aaa’ ratings from Standard & Poor's and Moody’s Investors Service: $483 million of notes with a WAL of 1.12 years priced at 26 basis points over the Eurodollar synthetic forward curve; $488 million of notes with a weighted average life of 2.42 years priced at 25 basis points over interpolated swaps and $142.89 million of notes with a WAL of 3.64 years priced at 30 basis points over swaps.
Spreads were in line with the most recent prime auto loan deal, from Carmax, which priced in early August. The 1.11-year tranche of that deal yields 20 basis points over the Eurodollar synthetic forward curve; while the 2.54-year tranche yields 25 basis points over swaps.
The transaction is the Ally’s third prime auto loan securitization this year. It is backed by a pool of loans with a weighted average FICO score of 749.6; that's an increase from the previous deal, which had a weighted average FICO of 745.8.
However the weighted average loan-to-value ratio of the pool backing 2014-2 has increased, to 97.75% from 95.8%. According to S&P’s presale report, the pool also includes a greater percentage of longer-term loans. Loans with terms of 61 top 75 months increased to 70.3% from 63.6% in the previous deal and loans with terms from 73 to 75 months have increased to 15.4% from 10%.
