GM Marketing $1B Prime Auto Loan ABS

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GM Financial Services is marketing its first auto loan securitization of the year, according to Standard & Poor’s.

The $1.0 billion GM Financial Consumer Automobile Receivables Trust 2017-1 will issue a $217 million money market tranche and three classes of term notes with preliminary AAA ratings from S&P: $345 million with a final maturity of March 2020, $310 million maturing in October 2021 and $85.85 million maturing in May 2023. All four senior tranches benefit from initial credit enhancement of 6.1%.

There is also a $16.82 million tranche rated A+, a $15.72 million tranche rated A-, and a $12.72 million unrated tranche.

JPMorgan Securities is the structuring agent.

The notes will be backed by a pool of prime automobile loan contracts secured by new and used automobiles, light-duty trucks, and utility vehicles. The loans have a weighted average FICO of 769, putting them comfortably in prime territory, and the weighted average loan-to-value ratio is 95.

The loans have original terms of 67 months, on average, and are seasoned by 10 months. However, just over half have terms of between 61 and 71 months and just over 15% have terms of 73-75 months. Loans with longer terms are generally considered to be riskier because they amortize more slowly, leaving the borrower underwater for longer.

S&P expects the pool to experience cumulative net losses in the range of 1.15%-1.35%, in its base case scenario.

GM previous auto loan securitization was completed in .. though it tapped the market this month with bonds backed by auto leases.

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