Ally Financial

According to Moody's, Ally's latest auto-loan ABS will not require the issuer to repurchase loans with modified terms or maturities.

According to Moody's, Ally's latest auto-loan ABS will not require the issuer to repurchase loans with modified terms or maturities.

While demand is strong and loan performance generally remains solid, the prevalence of longer loan terms has sparked concern that losses will eventually spike.

The $1.11 billion Ally Auto Receivables Trust (AART) 2019-2 deal has three classes of senior term notes with early AAA ratings by S&P Global Ratings and Fitch Ratings.

Measures of loan performance were generally better than expected at Ally, American Express, Synchrony and Sallie Mae. Their 1Q reports suggest that consumers remain able to meet their obligations despite a long run-up in debt.

Executives from Ally Financial and Santander Consumer USA gave rosy outlooks about 2019 consumer trends, while other banks that rely less heavily on car lending offered more cautious appraisals.

The three offerings launched Thursday add to the $3.9 billion of prime auto supply already issued this year by General Motors, Ford Motor Co. and CarMax.

Both S&P and Moody's have cut expected losses on $732 million deal, yet credit enhancement on the senior tranches is unchanged from the prior deal.

DriveTime is making less-risky loans under a $750 million contract purchase agreement with Ally Financial; it appears that the sponsor is also funding some of this lending through its own securitization platform.

The Series 2018-3 consists of five tranches of fixed-rate, two-year notes and the Series 2018-4 consists of five tranches of floating-rate, three-year notes.