A pool of subprime auto loans that Global Lending Services originated will provide collateral for $907.7 million in asset-backed securities (ABS), coming to market from GLS Auto Receivables Issuer Trust.
The note series 2026-1 arrives four months after Global Lending Services agreed to a buyout by Sixth Street Partners from funds owned by Sound Point Capital Management.
GCAR 2026-1, as the deal is known, will issue seven classes of notes through a structure that will repay investors sequentially, as the class A1 notes receive principal payments before all subordinate tranches, according to ratings analysts at Kroll Bond Rating Agency.
Overcollateralization, initially, is 3.55% of the pool balance, KBRA said. That will increase to its target level, which equals the sum of 11.25% of the current pool balance, plus 1.50% of the initial pool balance as of the transaction's cutoff date.
There is also a cash reserve account, equaling about 1.00% of the pool balance as of the Dec. 31, 2025 cutoff date.
A closer look at the collateral pool shows the loans are financing primarily used (83.5%) vehicles, according to ratings analysts at Morningstar DBRS. New cars account for 16.42% of the financings. Also, a large majority of the loans in the pool were financed through franchise dealers, in keeping with its business model, according to DBRS.
The rating agency adds that the loans in the pool have a weighted-average FICO score of 574, and a WA annual percentage rate of 20.6%.
This pool composition prompts a cumulative net loss (CNL) assumption of 16.9%, DBRS said.
Analysts at S&P Global Ratings found several structural changes to GCAR 2026-1, compared with GCAR 2025-4. Total initial credit enhancement increased to 11.40% for the class D notes, from 11.25%. It also decreased for classes B, C and E to 36.80%, 23.40% and 4.55% respectively, from 36.95%, 23.85% and 5.00%, respectively. Enhancement levels on the class A notes stayed the same.
Initial overcollateralization, though, decreased to 3.55% on the GCAR 2026-1 notes, from 4.00% on the GCAR 2025-4 series.
S&P assigns ratings ranging from A1+ on the A1 notes to BB on the class E notes; KBRA's ratings include K1+ on the A1 notes through BB- on the class E notes; and DBRS's assigned ratings include (P R1 (high) (sf) on the A1 notes through (P) BB (sf) on the class E notes.
