In its first asset-backed securitization, the General Electric Credit Union (GECU) 2023-1 is preparing to issue its first deal, a $306.9 million transaction secured by receivables from motor vehicle loans and retail installment loan contracts.
Sport utility vehicles (SUV) automobiles, light trucks and vans will comprise the collateral pool for GECU Auto Receivables Trust, 2023-1. The deal is a 144a transaction, and has several advantages that help enhance the credit of the notes, according to ratings analysts from Moody's Investors Service.
For one, the sponsor has a long standing servicing history, with 70 years of experience servicing auto loans. Even when it sells contracts to other entities, it services the loans, according to Moody's. Also, the collateral pool is of prime credit quality, with a weighted average (WA) credit score of 650, and about 99.6% of obligors have a credit score greater than 660, Moody's said.
J.P. Morgan Securities is lead underwriter on the deal, according to a pre-sale report from S&P Global Ratings. AmeriCredit Financial Services is acting as sponsor, originator, servicer and administrator, according to S&P. For its part, S&P notes that the collateral had a WA FICO score of 780. Classes A, B, and C notes had credit enhancement levels of 23.5%, 19.5%, and 16.1%, respectively.
Moody's sets its cumulative net loss expectation for the GECU 2023-1 at 3.25%, with the loss at the 'Aaa' stress at 14.00%.
S&P expects to assign ratings of 'A-1+' to the A-1 notes; 'AAA' to the A-2-A/A-2-B notes through A-4 notes; 'AA+' to the class B notes; and 'A+' to the class C notes. For its part, Moody's expects to assign 'P-1' to the A-1 notes; 'Aaa' to the A-2 through A-4 notes; 'Aa1' to the class B notes; 'A1' to the class C notes and 'Baa2' to the class D notes, the rating agency said.
Virtually all of the notes are fixed, except for the A-2-B notes, a subset of the second tranche that could be floating, according to S&P.
The notes have legal final maturity dates of Aug. 20, 2024 through Jan. 20, 2028.
