NEW YORK, Jan 8 (IFR) - Ally Financial is prepping its first
ever non-prime retail auto loan transaction with an offering
expected to be announced early next week, subject to market
Ally, the former auto lending arm of General Motors
Co, is expected to unveil a structure consisting of US$790m in
sequentially tranched Triple A classes and US$150m in Double A,
Single A and Triple B notes.
Bank of America will be structuring lead with Barclays and
Citigroup acting as joint leads.
Moody's and Standard & Poor's are expected to assign the
ratings. The subordinated tranches may be retained initially by
the depositor or its affiliate, deal documents show.
The primary assets will consist of a pool of fixed-rate
retail installment sale contracts and direct purchase money
loans used to finance the purchase of new and used cars and
All of these contracts and loans are obligations of
non-prime credit quality obligors.
Receivables with non-prime obligors have higher default
rates than those with prime credit and some may not qualify for
conventional motor vehicle financing due to a lack of or adverse
credit history, low income levels or the inability to provide an
adequate down payment.
The FICO score is approximately 630, which is roughly 39
points higher than the subprime-retail backed Santander
offering, which is expected to price this week. Given the deal's
novelty, there are no direct pricing comparables.
Similar to Ally Bank deals (Ally Prime Auto and Ally Auto
Lease), AFIN deals will be serviced by Ally Financial Inc.
Ally has returned its focus to auto lending and Internet
banking after spending the last several years working to repay
billions of dollars of debt raised in a series of
In December, the company, which is still 74 percent owned by
the US government, repaid the final USD4.5 billion of debt
extended to it by the government's Temporary Liquidity Guarantee
Ally was bailed out after suffering heavy losses at its
Residential Capital mortgage unit during the 2008 financial
Last year, ResCap filed for bankruptcy and Ally reached
agreements to sell international operations in an effort to
speed up repayment to taxpayers.