General Motors Acceptance Corp. may be issuing a lot less ABS than expected this year, and possibly for the next five, as Bank of America Corp. last week agreed to buy $55 billion worth of retail auto loans from GMAC over the next five years. Not only will the deal reduce the amount of loans GMAC has available to securitize, but sources also believe BofA is not likely to securitize any of those loans via its new Bank of America Securities Auto Trust.
Under the agreement, BofA will make an initial purchase of $5 billion in GMAC loans, and then to buy as much as $10 billion of loans from GMAC through June 2010. The $10 billion per year represents approximately 30% of GMAC's U.S. retail loan originations. The deal is seen as a boon to GMAC as the company now has a guaranteed market for its retail auto loans, enabling it to continue offering loans at competitive rates.