GM Financial is sponsoring two securitization deals that will sell $867.1 million in bonds to investors, selling notes through two series of the GMF Floorplan Owner Revolving Trust.
The first of these series, the 2024-1, issues notes through five tranches of class A, B, C and D notes, and the 2024-2, which issues notes through four tranches of class A, B, C and D, according to Moody's Investors Service. The two series have several identical characteristics, including initial hard credit enhancement levels of 27.9% on all the class A notes; 22,9% on the class B notes; 18.4% on the class C notes; and 14.4% on the class D notes.
All the notes are fixed rate, except for the A2 tranche in the 2024-1 series, which could be benchmarked to the Secured Overnight Financing Rate (SOFR) according to Moody's. Credit enhancement, on both series of notes, also includes a reserve account representing 0.86% of the pool balance.
The series have legal final maturity dates that are two years apart, starting with an expected legal final maturity date of March 15, 2029 on the 2024-1, and two years later on the 2024-2. Moody's notes that GMF's wholesale master trust has strong credit quality, with $0 in losses. Also, every General Motors franchise dealer has an agreement with General Motors Company in which the manufacturer commits to repurchase unsold new vehicle inventory should a dealer be terminated.
But the transactions have some credit challenges, according to Moody's, including a lower dealer concentration of trust relative to its peers. Also, the deals have revolving periods—three for the 2024-1 and five for the 2024-2—during which noteholders will not receive any principal. This could compromise the timely repayment of notes if they amortize during a more adverse economic or business environment.
The pool has 1,839 accounts with an average balance of $5 million, and an average credit line of $12.4 million.
On the Series 2024-1, Moody's assigns ratings of Aaa to the A1 and A2 notes; Aa1 to the class B notes; Aa2 to the class C and A1 to the class D notes. Ratings on the 2024-2 notes were the same, except for the absence of the A2 notes. On the 2024-1 series Fitch Ratings, meanwhile, assigns ratings of AAA to the A1 and A2 notes; AA to the class B notes; A to the class C; and BBB to the class D. Ratings on the 2024-2 were also identical, except for the absence of the A2 notes.
