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Nearly 52% of the pool in the captive-finance company's first 2018 vehicle-lease securitization involves contracts for popular crossover models like the Chevrolet Equinox, the GMC Acadia and Cadillac XT5.
Over 94% of the collateral pool consists of diesel-engine vehicles, even though diesel cars have had waning interest among French drivers in the past decade.
The Detroit company recorded an 11% increase in car loans and leases originated during the fourth quarter, as well as a jump in yields. Ally appears to be benefiting from Wells Fargo's substantial retrenchment in auto lending.
The single-B rated company is facing a large cash requirement as it ramps up production of its Model 3; but leases backed by electric vehicles pose additional risks for investors in asset-backeds.
The deal is the first vehicle loan securitization for the London affiliate of South Africa's FirstRand Group since November 2016.
BMW Financial Services is launching its first U.S. auto-loan securitization in two years, while Daimler AG's U.S. captive finance arm is proposing a $1.3 billion to $2 billion pooling of luxury auto leases.
Citing the dim financial outlook for a business it entered just six years ago, the Wayzata, Minn., company will stop making auto loans on Dec. 1.
The €309 million Orbita Funding 2017-1 plc follows a 2016 transaction by the venerable British bank.
To compensate for weakening used car prices, Hyundai has lowered the base residual value, or the amount it expects to be recovered when cars come off lease and are resold.
The hurricanes destroyed hundreds of thousands of cars, and banks are significantly boosting their reserves in anticipation of higher defaults on auto loans. But there is also a silver lining for auto lenders.
The captive finance arm of General Motors has been pulling back on leasing, but it still expects to be negatively impacted by falling used car prices for the remainder of the year.
After issuing only a single prime auto lease securitization in 2016, Ford Motor Credit's trust has returned to its traditional twice-annual schedule it followed from 2010-2015.
CarMax, BMW, Santander and Credit Acceptance Corp. all launched deals Thursday; they add to the $35 billion in prime auto, $12.31 billion in prime lease, and $19.4 billion in subprime auto loan ABS so far this year.
Over 80% of the cars are diesel-engine vehicles, bringing potential volatility to the portfolio cash flows given the public debate over potential panning such cars in several European urban centers.
Nissan's second U.S. lease-securitization of 2017 pools more than 71,000 contracts with $1.5 billion outstanding on cars, SUVs and cross-overs. Delinquencies remain low, but residual values are growing volatile.
