Credit quality in General Motors Financial Co. securitization pools has been steadily climbing, according to a presale report by Moody’s Investors Service.
GM’s latest ABS issuance — GM Financial Consumer Automobile Receivables Trust 2017-3 — is a $1 billion transaction backed prime retail installment auto loans, according to the report.
“The credit quality of the collateral in the 2016-3 pool is strong and reflects GMF’s prudent underwriting practices,” Moody’s said in the report. “The weighted average Fico of 751 is similar to the 2016-1 pool and six points higher than that of the 2015-3 pool.”
“The weighted average Fico of 771 is at the higher end of the Fico range of the pools which captive finance companies have securitized recently,” according to the report. The Fico is up from 763 in its 2017-2 transaction, and up from 751 in its 2016-3 issuance backed by prime lease receivables.
The weighted APR is 2.87% in the 2017-3 transaction — higher than that of its peers, such as American Honda Finance, Ford Motor Credit Co., Nissan Motor Acceptance Corp., and Toyota Motor Credit Corp. Additionally, the weighted average original term in the 2017-3 trust is 67 months, in line with 2017-1 and 2017-2.
Notably, GM Financial started to originate prime auto loans in 2014. “While GMF has extensive performance data on its subprime auto loan ABS pools, the weighted average Fico, APR, and LTV of those subprime pools differ materially from this pool,” Moody’s said in the report. “Lack of relevant securitization performance history makes forecasting loss more difficult.”
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