Auto ABS

Total initial hard credit enhancement decreased compared with GCAR 2024-3, subordination for class A notes was unchanged at 48.2%.

All AHART 2024-1's assets are backed by a pool of prime-quality auto loans and retail installment sales contracts, which the lender originated either directly or through relationships with franchised motor dealer channels.

The fixed-rate notes are expected to yield 4.90% on the A1 notes through 5.29% on the class D notes.

The current pool has the largest proportion of longer-term loans, at 49.8%. While this is a concern for analysts, the rest of the industry has seen this kind of increase.

The senior tranche will sell a mix of floating and fixed-rate notes, benefiting 22.5% in credit support. The class B notes are covered to a level of 15.0% and the tranche sells all fixed-rate notes.

The note balance can be upsized to $1.2 billion in auto ABS, according to Moody's Ratings, and the pool size can be increased to 26,514 contracts.

Notes benefit from overcollateralization of 2.60% of the initial pool. Subordination and a sequential payment priority will cause enhancement to be built up in the transaction, with overcollateralization reaching 4.5%.

In a potential credit drawback, TALT 2024-B has a residual value setting of 51.3% of the manufacturer's price. It was less than 50% in all the 2023 lease securitizations.

The collateral has subprime credit attributes, the credit quality of the Westlake 2024-3 pool was incrementally better than the 2024-2 transaction, and notably better than the 2023-4 deal.

All the three senior class A notes benefit from 60.95% in total initial hard credit enhancement. A reserve fund representing 1.00% of the total balance helps provide the credit enhancement to the notes.