Huntington Auto, Ally Financial issue synthetic auto securitizations

Huntington Auto Finance and Ally Financial have issued synthetic auto securitizations structured as credit-linked notes in August. Huntington issued its second auto credit-linked note (CLN) deal of the year and fourth ever on Aug.11, a $414.8 million prime transaction, according to Finsight , which monitors securities. The financier's first auto CLN deal of 2025 was issued March 11, a prime transaction also for $414.8 million. In 2024, Huntington's CLN issuance totaled $964.7 million across two deals, one in June and one in October, according to Finsight. Banks typically structure synthetic securitizations , which offload the credit risk of the underlying loans to third-party investors, as directly issued CLNs, according to Fitch Ratings . Payments are calculated based on the performance of the deal’s reference pool of loans. Synthetic securitizations tick up Huntington’s August deal includes a reference pool of $3.1 billion with a weighted average (WA) loan term of 72 months, WA loan-to-value (LTV) ratio of 93%, WA APR of 8.13% and a 774 WA FICO score, according to an Aug. 7 Moody’s Ratings presale report. On Aug. 6, Ally Financial came to market with its first auto CLN deal of the year and third ever, a $549.5 million prime transaction, according to Finsight. In 2024, Ally’s total CLN issuance was $770.3 million across June and October prime deals. Deal characteristics include a reference pool of $4 billion, with a WA loan term of 74 months, WA LTV ratio of 103%, WA APR of 9.03% and a 753 WA FICO score, according to a July 31 Moody’s presale report. The bank’s CLN issuances follow an uptick in synthetic securitizations last year by banks. CLN issuances allow a bank to keep assets on its balance sheet while paying investors a premium to take on the risk associated with the reference portfolio. Huntington’s and Ally’s 2025 combined CLN issuance total nearly matches the total market issuance through October 2024 of $1.4 billion, according to Auto Finance News’ analysis of Finsight data. Banks turned to significant risk transfer through synthetic securitizations to address proposed increases to federal capital requirements. However, under President Donald Trump ’s administration, those proposals could be changed, with a more relaxed plan expected in early 2026, according to an Aug. 1 Bloomberg report. Huntington and Ally did not provide comment by publication time. Huntington Auto Finance’s originations climbed 9.5% year over year in Q2 to $2.3 billion, according to its July 18 earnings presentation. Auto outstandings rose 16.2% YoY and 3.4% quarter over quarter to $15.4 billion, according to the Q2 earnings supplement. Huntington ranked 25th on the list of auto lenders by outstandings at $14.6 billion at yearend 2024, according to the latest Big Wheels Ranking data . Ally’s auto originations totaled $11 billion in Q2 , up 12.2% YoY, and auto loan and lease outstandings came in at $91.8 billion, down 0.1% YoY. Ally was the third-largest auto lender by outstandings at yearend 2024, according to the latest Big Wheels Rankings data . Stellantis issues $1B lease ABS Meanwhile, Stellantis Financial Services is among seven lenders that issued auto asset-backed securitization (ABS) deals so far this month, according to Finsight. On Aug. 8, Stellantis Financial Services came to market with a $1 billion ABS deal backed by leases . This marks the captive’s first auto ABS transaction following several hurdles faced by the OEM during the year. Fitch Ratings downgrade d the manufacturer's outlook to “negative” from “stable” on Aug. 4 on the heels of high tariff exposure and slumping sales . Fitch affirmed the company's long-term issuer default rating at BBB but announced it would no longer be providing ratings for Stellantis and withdrew existing ratings, according to a release. Stellantis also updated its estimated tariff impact for 2025 to $1.7 billion , according to the OEM’s first half 2025 earnings report July 29. Stellantis reported that $349.8 million of that estimate was incurred in the first half of the year. [caption id="attachment_58354092" align="alignnone" width="930"] Source: Big Wheels[/caption] Other lenders that issued auto ABS transactions this month, according to Finsight, include: American Honda Finance Corp.: On Aug. 5, issued a $2.4 billion prime deal; Ford Credit: On Aug. 5, issued a $1.3 billion prime securitization; Global Lending Services: On Aug. 7 , issued a $713.2 million subprime deal; GM Financial: On Aug. 5, issued a $994.9 lease transaction. Lithia Motors: On Aug. 6 , issued a $531.1 million prime transaction; World Omni Financial Corp.: On Aug. 5 , issued a $1.2 billion prime auto ABS; and Capital markets sentiment Many financiers that have come to market recently say their performance was met with strong investor sentiment against a robust ABS market. “Our participation in the auto ABS market is a powerful tool for both liquidity and balance sheet management,” Gabe Engman , chief financial officer at Melbourne, Fla.-based Space Coast Credit Union , told AFN . The credit union’s most recent auto ABS deal was issued July 29, a $687.6 million transaction backed by prime auto loans. “Access to the depth of the public markets not only strengthens our economics, but it also fuels our ability to grow, innovate and better serve our members while setting new benchmarks for the entire credit union industry,” Engman said. Subprime lender FinBe USA also experienced strong investor appetite when it issued its inaugural auto ABS deal in June , Chief Executive Scot Seagrave told AFN . “There's money out there,” he said, noting that the company hopes to issue an ABS deal every 12 to 18 months. “By and large, the senior bonds are fairly protected [and] it's a good investment.” Floorplan financier NextGear Capita l, a Cox Auto company, also saw strong investor interest in its deal backed by floorplan loans issued in March, Cox President Scott Maybee told AFN. "Our cost of funds is favorable because we're performing. A lot of who we answer to is the banks that invest in us,” Maybee said. The lender issued a $328 million ABS deal on March 4 , and plans to issue another one this fall, he said. Total auto ABS volume climbed 2.3% year to date from the same time last year to $113.6 billion as of Aug. 8, according to the latest data from JPMorgan Securities . [caption id="attachment_58354093" align="alignnone" width="1656"] (Source/JPMorgan Securities data 8.8.25 | Chart/Auto Finance News)[/caption] YTD issuance volume by credit tiers was: Prime ABS issuance totaled $52.5 billion YTD, a 1.5% increase YoY; Non-prime ABS issuance totaled $27.9 billion YTD, up 2.3% YoY; and Lease ABS issuance totaled $22.7 billion, up 12.4% YoY. — Additional reporting by Amanda Harris Join the “Capital Markets in Flux” conversation at Auto Finance Summit on Oct. 17, where industry leaders Elen Callahan , head of research at Structured Finance Association , and Xiaowei Luan , managing partner and co-founder of AX Partners , will discuss strategies for navigating the shifting credit market. Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 15-17 at the Bellagio Las Vegas. Learn more about the 2025 event and take advantage of the Aug. 29 early-bird registration here .

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