Global Lending Services brings $290.5 million in auto ABS to market

Global Lending Services is preparing to sell $290.5 million in auto asset-backed securities (ABS) to investors through its GLS Auto Select Receivables Trust, series 2025-1, secured by prime quality retail installment loans.

Structurally, the GSAR 2025-1 transaction has 22.5% in subordination for the class A notes, down from 22.8% seen on the GSAR 2024-4 deal, according to S&P Global Ratings. Also, pre-pricing excess spread fell to about 7.8% of the outstanding balance, from 8.9% on the previous deal, S&P said.

GSAR 2025-1 will issue all fixed-rate notes through five tranches of A, B, C and D notes, S&P and Moody's Ratings said. Legal final maturity dates range from Jan. 15, 2026 on the A1 notes through April 15, 2032 on the class D notes.

The A1 and A2 notes benefit from total initial hard credit enhancement totaling 26.8%, Moody's said. Classes B, C and D benefit from levels totaling 21.1%, 12.7% and 4.3%, respectively, Moody's said. Part of the credit enhancements include a reserve fund that equals 1.00% of the pool balance, the rating agency said.

Moody's puts its cumulative net loss (CNL) expectation for the GSAR 2025-1 transaction at 9.0%. The loss at a Aaa stress is 35.0%.

Other forms of credit enhancement include overcollateralization, subordination and excess spread, Moody's said.

J.P. Morgan Securities, BMO Capital Markets and Goldman Sachs are lead underwriters on the deal, which is slated to close on January 15.

With a portfolio of about $7.3 billion in auto loans, including $2.1 billion of prime auto loans. The company has also sponsored and serviced more than 34 ABS transactions since 2012, Moody's said. Also, compared to GLS' prime pools the current transaction has stronger credit quality. On a weighted average (WA) basis, the underlying loans have a non-zero FICO score of 699, which is at the higher end of GSAR's historical range, compared to recent GLS prime pools.

The pool also has a lower percentage of used cars, at 79%. Percentages on previous transactions, the Global 2024-4 through 2024-4, ranged from 80% to 86%, according to Moody's.

Moody's assigns ratings of P1 to the A1 notes; and Aaa, Aa2, and A2 to the A2, B and C tranches. S&P assigns A1+ to the A1 notes; AAA, AA, A and BBB to the A, B, C and D notes.