Fitch Ratings has upgraded Ally Financial’s long-term default rating and its senior unsecured debt rating to BB, an indication that the company’s rating outlook is stable. Fitch cited the approval of a bankruptcy court releasing Ally from beleaguered mortgage unit Residential Capital LLC, along with recent regulatory settlements. Those actions remove any mortgage-related contingent liabilities to Ally, Fitch said.
The report said Ally’s overall asset performance is being influenced more by its higher quality auto loan and lease portfolio. Ally has experienced favorable credit performance in its auto lending portfolio in the past few years, mostly from tighter credit underwriting and higher used-car prices, the report said.
Net losses in Ally’s U.S retail auto portfolio, which accounts for the bulk of the company’s portfolio, increased to 0.82% last quarter, from 0.49% in the prior-year period. Ally’s 30-day delinquencies grew to 2.10% in 3Q13 from 1.42% in 3Q2012.
