ALLCU is sponsoring a securitization of receivables from a pool of prime retail auto contracts bought from credit unions, raising $243.47 million through the Alloya Auto Receivables Trust, series 2026-1.
Alloya 2026-1 is expected to close on November 12, selling the series of fixed notes through seven tranches of class A, B, C, and D notes, with four senior tranches of notes, according to S&P Global Ratings.
The most senior tranche, rated ‘A-1+’, has an October 25, 2027 legal final maturity date, S&P said. The three following senior classes, A2, A3 and A4, will have legal final maturity dates of Jan. 25, 2030, Nov. 25, 2031 and Oct. 25, 2032, according to S&P.
Three subordinate tranches, classes B, C and D, mature on Jan. 25, 2033, April 25, 2033 and Oct. 25, 2034, respectively, the rating agency said.
Classes A1 through A4 get a credit boost from credit enhancement representing 13.82% of their respective note balances, according to S&P analysts. Classes B, C and D benefit from credit enhancement levels of 10.97%, 8.39% and 5.54%, respectively.
Aside from the most senior tranche, S&P assigns AAA ratings to classes A2 through A4, and outside of that, the rating agency assigned ratings of AA, A and BBB to classes B, C and D, according to the rating agency.
S&P notes that it expects a moderate stress scenario, the BBB rating level, it expects a loss level of 2.0x.
Several lenders, composed of Dort Financial Credit Union, Gesa Credit Union and Liberty Federal Credit Union originated the loans and contributed them to the collateral pool, S&P said. The deal introduces them as a new cohort of lenders and contributors to the platform.
The collateral pool has a weighted average (WA) credit score of 721, and an original term of 77.
Leverage is somewhat elevated on the underlying assets, with a loan-to-value (LTV) ratio of 109.65%. The pool appears to be geographically concentrated in Michigan (28.15%), Washington (25.68%) and Florida (6.15%), according to the rating agency.
