GM Financial Grows Dealer Base 17% in Latest ABS

The size of General Motors Financial Co.‘s dealer base continues to expand, but its 18% dealer penetration rate remains lower than GMF’s peers, according to a presale report by Moody’s Investor Service.

“This can indicate lower dealer quality of the portfolio relative to other issuers,” Moody’s said in the report. “However, as the number of dealers within the trust and the GMF’s dealer penetration rate are both increasing, we believe the credit quality gap — if it exists — between GMF dealers and GM dealers is shrinking.”

The number of active dealer accounts served by GM Financial within its latest securitization — GMF Floorplan Owner Revolving Trust Series 2017-3 — has grown to 764 at the end of June, from 652 at the end of September 2016, according to the report.

The 2017-3 trust is backed by $479.5 million in dealer floorplan receivables. This issuance is GM Financial’s fifth term dealer floorplan securitization and third of 2017.

With 764 accounts in GFORT 2017-3 as of June 30, the average balance is $8.3 million and the average credit line is $9.4 million. Among all of the states, Michigan, New York, and California make up the top three geographic concentrations.

One of the pool’s credit strengths lies in the “repurchase agreement between franchise dealers and vehicle manufacturers,” Moody’s said in the report. “Each General Motors-franchised dealer enjoys the benefit of an agreement with General Motors Co., in which the manufacturer commits to repurchase unsold new vehicle inventory upon dealer termination.”