GLS Auto Receivables Issuer Trust is returning to raise $469 million in asset-backed securities from investors, the 23rd GCAR securitization from Global Lending Services.
The 144a securitization will offer senior and subordinate securities, backed by a pool of subprime loans financing the purchase of used cars, according to ratings analysts at DBRS Morningstar. All of the class A notes—A1 through A3—will benefit from initial hard credit enhancement of 55.30%, and includes a 1.00% reserve account as a percentage of the original pool balance, DBRS analysts said. The notes will also have overcollateralization of 5.15% of the pool balance, and a subordination level equaling 49.15%.
Classes B, C, D and E benefit from credit enhancement levels amounting to 41.35%, 28.45%, 15.30% and 6.15%, respectively. Enhancements include a reserve account, excess spread and subordination. Overcollateralization is expected to build to a target equal to the sum of 9.50% of the collateral balance at the end of the previous collection period, according to the rating agency.
BMO Capital Markets Corp., Citigroup Global Markets and Wells Fargo Securities are managers on the deal, which is slated to close on November 30, according to the Asset Securitization Report's deal database.
As for pricing talk, the transaction is expected to issue notes benchmarked over the three-month interpolated yield curve, according to ASR's database. Spread talk ranges from 35 basis points over the three-month I-Curve on the class A1 notes to 535 basis points over the benchmark on the class E notes. The market expects the A1 notes to price at par, while the rest of the tranches actually price virtually at par.
DBRS expects to assign ratings of 'R1' to the most senior a notes; 'AAA' to classes A2 and A3; 'AA' to the class B notes; 'A' to the class C notes; 'BBB' to the class D notes and 'BB' to the class E notes. S&P Global Markets plans to rate the A1 notes 'A1+'. As for the rest of the notes, classes A2 and A3 will receive 'AAA' ratings; class B a 'AA' ratings; class C an 'A' ratings; class D a 'BBB-' and class E a 'BB-' rating.
