General Motors Financial is preparing to sponsor an issuance of at least $1 billion in asset-backed securities collateralized by prime-quality retail installment auto loan contracts.
The transaction, GM Financial Consumer Automobile Receivables Trust, 2026-1, will issue notes to investors through seven tranches of class A, B and C notes, according to Moody's Ratings and S&P Global Ratings, which assessed the deal.
Legal final maturities range from Jan. 19, 2027 on the notes rated A1+/P1 from S&P and Moody's to July 18, 2033, rated AA/Aa3 from the rating agencies.
Regardless of the balance on the outstanding notes, which are primarily fixed rate and can be upsized to about $1.3 billion, according to Moody's Ratings, the capital structure will stay the same.
BofA Securities, Deutsche Bank Securities, Scotia Capital and Wells Fargo Securities are the lead underwriters on the deal.
Initially, all the class A notes will benefit from total hard credit enhancement that represents 6.10% of the note balance, and the components give the notes a strong credit boost, Moody's said. For instance, GMF's is a strong sponsor and servicer, having completed more than 100 securitization deals involving auto loans, dealer floorplans and auto leases since 1994.
Also, recent transactions and GM Financial's managed portfolio have seen more stable performances. The lifetime loss expectations for outstanding deals issued between 2022 through 2024 range from 0.60% to 0.75%, and more recent managed portfolio vintages have performed similarly to the 2024 group of assets, Moody's said.
Notes will repay investors sequentially until the deal achieves its target over-collateralization level, Moody's said.
There have been several structural changes to GMCAR 2026-1, according to S&P. The discount rate on the initial supplement overcollateralization amount (YSOA) is 6.45%, down from 6.50%. Also, the initial YSOA, as a percentage of the initial adjusted pool balance, was 2.49%, a drop from 2.75%, S&P said
On a weighted average (WA) basis, the underlying mortgages have a FICO score of 770, and an annual percentage rate (APR) of 6.71%, both of which remain the same whether the number of obligors is 26,549 or 33,198, according to Moody's.
Moody's assigns Aaa to the A2 through A4 tranches, while classes B and C are rated Aa1 and Aa3, respectively. For its part, A&P assigned AAA to the A2 through A4 and AA+ and AA to the class B and C notes, respectively.
