GMCAR' second issuance of 2025 raises $956.1 million

A pool of revenue from prime auto loan receivables will secure at least $956.1 million in asset-backed securities from the GM Financial Consumer Automobile Receivables Trust, series 2025-2.

The expandable deal can issue up to $1.6 billion in notes, according to rating agencies S&P Global Ratings and Moody's Ratings. Coupons range from 4.45% on the notes rated A1+ and P1—from S&P and Moody's—respectively, to 4.91% on the notes rates AA and Aa2, according to Asset Securitization Report's deal database.

AmeriCredit Financial Services, a wholly owned subsidiary of General Motors Financial, the deal sponsor, originated the loans, according to Moody's Ratings.

GMCAR 2025-2's structure will issue notes through about seven tranches of classes A, B and C notes. They will have initial hard credit enhancement of 6.10% on all the class A notes, composed of overcollateralization, a non-declining reserve account and subordination. They could also benefit from excess spread.

Bank of America Merrill Lynch, J.P.Morgan Securities, TD Securities and Wells Fargo Securities are managers on the deal, ASR's deal database said. Meanwhile, RBC Capital Markets, Scotia Capital, SMBC Nikko Securities America, and Societe Generale are co-managers, the database said.

Underlying loans have strong credit quality, Moody's said, with a weighted average (WA) FICO score of 782 for all the pools, regardless of their size. Also, the original WA term is about 68 months for all three pools. While that is shorter than the term on the previous series, the 2025-1, it is within the range of terms seen on recent deals.

Aside from the class A notes, the B and C notes benefit from 4.50% and 3.00% in hard credit enhancement.

GM Financial's experience as a sponsor—after completing more than 100 securitizations of retail auto loans, dealer floorplan revenue and auto leases since 1994—also adds to the deal's credit strength.

Yet there are some credit challenges, according to Moody's. Up to 75% of the class A-2 notes will pay a coupon based on the Secured Overnight Financing Rate (SOFR), but the assets pay fixed rates of interest. A spike in interest rates would erode excess spread in the transaction, the rating agency said.

Moody's assigns P1 to the A1 notes; Aaa to the A2 through A4 notes; and Aa1 and Aa2 to classes B and C, respectively. S&P assigns A1+ to the A1 notes; AAA to the A2 through A4 notes; AA+ to the class B notes and AA to the class C notes.