GMF Floorplan Owner Revolving Trust is preparing to sell $684.9 million in asset-backed securities, backed by floorplan financing contracts between GM Financial and auto dealerships.
GM Financial, originated the agreements, according to Moody's Ratings. The transaction, GFORT 2024-4, will issue notes through four tranches of A, B, C and D notes, according to analysts at S&P Global Ratings, which assessed the deal, along with Moody's Ratings. In GFORT's 19th term securitization, the notes have an expected final maturity date of Nov. 15, 2029, according to the rating agencies.
Moody's says the master trust has not registered any dollar losses, a credit plus. Also, the portfolio's three-month average monthly payment rates have consistently performed above payment rate triggers, the rating agency said.
BMO Capital Markets, Deutsche Bank Securities, Lloyds TSB Corporate Markets and SMBC Nikko Securities America.
The notes are expected to pay a yield of 4.78% on the Aaa/AAA (Moody's/S&P) to 5.03% on the notes rates Aa2/A, by Moody's and S&P, respectively, according to Asset Securitization Report's deal database.
Also, General Motors Company, the manufacturer of the cars in the portfolio, ha a repurchase agreement with each GM-franchised dealer, where GM commits to repurchasing unsold new vehicle inventory after dealer termination, the rating agency said. New, non-GM vehicles may also be covered by a repurchase agreement, Moody's said.
Structurally, the deal does not show any notable changes from the series 2024-1 or 2024-2 transactions, S&P said. When compared with the series 2023-1 and 2023-2, although, the concentration of fleet accounts increased to 5%, from 2%, S&P says.
Among its credit challenges, GFORT 2024-4 has an interest rate mismatch between the assets and the issued notes. Dealers pay a floating rate, based on the prime rate, while the trust has a substantial amount of fixed-rate liabilities. This could reduce excess spread in the trust to the point where it is negative, Moody's said.
Moody's assigns Aaa to the A1 and A2 notes, respectively; Aa1 and Aa2 to the B and C notes. S&P assigns AAA to the A1 and A2 notes; AA to the class B notes; and A to the class C notes.
