Americredit is coming down the pike with another securitization of subprime auto loans, according to a pre-sale from Moody’s Investor Service.
Totaling nearly $1.27 billion, the deal is split into eight tranches. Moody's has given three A tranches totaling $852 million a 'Aaa' rating. the transaction is the second senior-subordinate transaction of 2014 in this asset class from Americredit.
Bank of America Merrill Lynch, Deutsche Bank, Royal Bank of Canada, and Wells Fargo are arranging the deal.
The tranches have an array of maturities, designed to cater to a variety of investor appetites.
Subprime auto deals from AmeriCredit have historically exhibited losses between 6% and 20%, according to the pre-sale. Transactions closed from 2009 and 2013 have “performed strongly,” the agency said.
The risks facing the deal’s performance include a slowdown in job growth and other macro-economic uncertainties.
In addition, one of the tranches, the Class A-2-B, bears a spread over one-month Libor. This leads to interest-rate risk, as a spike in rates would eat into the excess spread on this class of notes.
AmeriCredit is the primary operating subsidiary of General Motors Financial Company.