As promised, non-prime auto lender AmeriCredit Corp. has brought an auto loan ABS backed by a wrap from guarantor XL Capital, albeit three months after initially thought (see ASR 2/24/03). The $600 million fixed- and floating-rate 2003-B-X transaction, led jointly by Credit Suisse First Boston and Deutsche Bank Securities has seen guidance released and is on track to price this week. AmeriCredit last tapped the market April 24, with an MBIA-wrapped 2003-A-M deal via Barclays Capital and Deutsche Bank.
Price guidance for the most recent offering is even a touch inside the levels where AMCAR 2003-A-M, priced back in April, but traders said that 2003-B-X offered spreads are in line with the previous trade, which tightened in the secondary market. After much speculation earlier this year, this will be the third liquidity injection AmeriCredit has lined up this year, for a total of $2.6 billion. Aside from the MBIA-wrapped 2003-A-M deal, AmeriCredit closed a $1 billion whole loan facility via Deutsche Bank in March (see ASR 3/24/03).
Following the previous transaction's pricing, sources said that, at the time, the MBIA wrap was the safer bet. "Investors are more comfortable with MBIA," one source said. "XL was more of a wild card and it would have been reflected in the pricing." AmeriCredit added that expanding surety exposure was part of the issuer's plan all along. AmeriCredit had initially planned on a pair of securitizations, according to company spokesman John Hoffmann, adding that it always planned one wrapped by MBIA and one wrapped by XLCA. "AmeriCredit does plan to work with XL Capital in future ABS offerings," he said at the time.
While collateral composition is consistent with previous transactions and which have seen improved delinquency data, there are concerns going forward with the parent. In April, Fitch Ratings cut the corporate unsecured ratings of AmeriCredit to single-B from single-B plus. In January, Moody's Investors Service cut the unsecured ratings at the parent level to B1 from Ba3. Both rating agencies have AmeriCredit on watch for a possible downgrade. "The negative outlook reflects continued liquidity constraints due to weakened asset quality measures of securitizations and increased enhancement requirements for new transactions," Fitch says in its presale report for 2003-B-X.
As a result, JPMorgan unit System & Servicing Technologies (SST) has been included as a backup servicer, to take over in the event of a servicer termination event. SST also acts as backup servicer on the aforementioned 2003-A-M transaction. AmeriCredit has used two other surety providers in the past. The majority of its ABS is guaranteed by FSA, with two wrapped by MBIA. The FSA-wrapped deals have hit performance triggers and began trapping cash away from the parent.