After AmeriCredit Corp. came to market with two deals almost back to back, Fitch Ratings last week downgraded the long-term Issuer Default Rating (IDR) of AmeriCredit Corp. (ACF) to 'B' from 'B+'. All ratings remain on Rating Watch Negative. Approximately $750 million of debt is affected by this action.

According to Fitch, the downgrade reflects the impact of reduced origination volume and profitability prospects on the auto firm's franchise value, and the potential that AmeriCredit could trip the net charge-off covenant on its master warehouse facility as the combined impact of a shrinking portfolio and seasonal credit deterioration could inflate the six-month average net loss rate above the 8.5% trigger.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.