Ally Financial Inc. upsized its subprime auto deal, Capital Auto Receivables Asset Trust 2013-1, to $1.56 billion from $940 million.
According to a Moody's Investors Service presale report, that the transaction is the first public deal to come out of the CARAT program and the Ally’s first public transaction with a collateral pool consisting predominantly of non-prime loans.
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 deal prospectus supplement 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 assigned preliminary ratings to the transaction. The updated capital structure includes $1. 315 billion of class A notes, rated 'Aaa'; $69.9 million of class B notes, rated 'Aa1'; $102.8 of class C notes, rated 'A1' and $78.14 of class D notes, rated 'Baa2'. BofA Merrill Lynch, Barclays Capital and Citigroup are lead underwriters on the deal.
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."