Like other increasingly risk-averse subprime auto lenders. AmeriCredit has boosted the credit quality of the collateral for its first securitizaton of the year.
According to a regulatory filing Wednesday, Americredit plans to offer $930 million notes backed by a pool of indirect subprime loans originated and issued through its dealer network. The loans, are for new and used autos, light-duty trucks and vans made to borrows with prior credit blemishes (with scores between 500 and 700).
AmeriCredit Automobile Receivables (AMCAR) Trust 2017-1 will issue seven classes of notes, including four senior tranches: a Class A-1 money-market series totaling $182 million; a split $305 million A-2 series of three-year notes divided between floating- and fixed-rate tranches; and a $189 million Class A-3 tranche of four-year notes.
Standard & Poor's and Fitch Ratings on Thursday issued preliminary 'AAA' structured finance ratings on the multi-year senior notes, and short-term 'A-1'/'F-1' ratings to the one-year Class A-1 notes. The Class A notes have credit enhancement of 35.2%, similar to AmeriCredit's previous transaction in September.
In its most recent transaction, completed in September (the $1 billion AMCAR 2016-4), AmeriCredit received triple-A ratings from S&P and Fitch Ratings for the senior term notes.
There will also be $73.37 million of Class B notes (rated 'AA+'/'AA' by S&P and Fitch) and $91.08 million in Class C notes ('A+'/'A'), each series due 2022; and a $89.55 million of Class D notes due in 2023 ('BBB+'/'BBB').
S&P is not rating a subordinate Class E tranche sized at $23.78 million being retained.
The principal balance of the 50,671 loan contracts being included is $1.01 billion, with an average principal balance of $19,971.38 and a weighted average APR of 12.71. The average contract terms were 71 months. The average APR is 575.
The annual percentage rate on the loans used as collaterl has increased, from 12.2% in the most recent deal, and 11.8% in its 2016-3 transaction.
AmeriCredit is also cutting down the number of lengthier term loans. The percentage of 61-72 month loans in the pool is just 85.28% of the pool, compared to 89.1% in the 2016-4 transaction. AmeriCredit’s collection of six-year loans was over 90% of the pool for AMCAR 2016-3.
The percentage of borrowers in its higher-score buckets is unchanged at 47.1% of the pool.
AmeriCredit is a subsidiary of General Motors Financial Co. (GM Financial).
As of December, AmeriCredit managed a portfolio of about 1 million auto loan contracts with an outstanding aggregate balance of approximately $21 billion.