E-CARAT 7 PLC is the latest British auto loan securitization of new and used Vauxhall Motors-branded vehicle loans originated by GMAC’s UK affiliate.
The UK trust will issue GBP £416.7 million (US$468.18 million) in three classes of senior and subordinate notes secured by the loans, which are predominately private retail (99.41%) sales agreements and contracts, as well as a handful of commercial (0.59%) customers.
Vauxhall Motors is a British manufacturing and distribution affiliate of German automaker Adam Opel AG, both of which are ultimate affiliates of General Motors Co.
The transaction is split into two rated classes of floating-rate notes, along with a subordinate fixed-rate tranche that Standard & Poor’s is neglecting to rate. The sizes of each tranche is to be determined, although the Class A notes with a preliminary ‘AAA’ structured finance rating will have 17.12% available credit enhancement and the B notes – rated ‘AA+’ – will carry 8.12% CE.
The notes’ CE is supported by a liquidity reserve equal to 1.2% of the Class A and B notes’ outstanding principal balance, with a floor of £200,000. The initial reserve size is at 1.1% of the outstanding balance. No new receivables will be added to the static transaction.
All the notes are eight-year notes with a legal final maturity of November 2024. The E-CARAT transaction is expected to close Dec. 19.
The loans in the pool are seasoned a weighted average of 8.14 months, with 42.73 months remaining. The average outstanding discounted principal balance is £9,138 (US$10,300), with a weighted interest rate of 3.97%. None of the loans have gone through a delinquency over 30 days.
According to S&P, 57% of the discounted pool balance is loans with straight amortization; the remaining loans have a final balloon payment.
The portfolio is “highly granular” and diversified, according to S&P, noting the top 20 borrowers in the pool account for just 0.09% of the discounted balance. More than 25% of the loans are concentrated in Southeast England including London.
The latest securitization, the seventh overall, is the first for GMAC UK since April 2016. GMAC UK is wholly owned by General Motors Financial Co.
