01/14/2011

GM Getting Handle on AmeriCredit Output

General Motors Financial is preparing to boost its securitization volume.

The auto lender, formed via GM's purchase of AmeriCredit last year, plans to offer $1.5 billion of fresh paper backed by subprime credits each quarter going forward. Its next such deal: An offering of at least $600 million that's set for late January or February.

Some auto-lease offerings also could come down the line. But even without those deals, the subprime-loan transactions alone would position GM Financial as a bigger issuer than AmeriCredit ever was. AmeriCredit's annual securitization volume peaked at $5.5 billion in 2005 and tapered off during the global financial crisis, falling to $725 million in 2009. Last year saw a rebound to $3.1 billion, according to Asset-Backed Alert's ABS Database.

The upcoming jump in GM Financial's issuance volume ties in with expectations that the former AmeriCredit would write more loans and leases as a unit of GM, in part by dealing with customers of its new parent. Right now, 25% of GM Financial's roughly $9 billion portfolio consists of loans on GM vehicles.

However, questions remain about exactly what types of accounts the shop will handle. It initially appeared that more prime-quality lending was in the cards. Now, however, it looks like affiliate Ally Bank might be first in line for that business.

On the subprime side, GM Financial is among players that could see their businesses jump with TD Bank's planned purchase of Chrysler Financial. That's because TD plans to cut back Chrysler's subprime-lending activities, which currently account for $3 billion of the company's $10 billion portfolio.

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