As auto lenders begin relying more heavily on favorable execution in the whole loan markets, investors are seeing more of an aggressive structure hit the sector. While the concurrent pay structure has obvious benefits to the issuer, it also heightens the extension risk for subordinate buyers, if the transaction is structured too aggressively.

While the $1.2 billion GS Auto Loan Trust 2004-1 from Goldman Sachs is the sixth offering with this structure (the five previous dealer auto loan deals are concurrent payers), the proliferation of the whole loan market for lenders has many predicting auto principal finance as the next trend in the sector.

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