OREANDA-NEWS. Fitch Ratings expects to assign the following ratings and Rating Outlooks to the AmeriCredit Automobile Receivables Trust 2016-4 (AMCAR 2016-4) as follows:

--$164,000,000 class A-1 notes 'F1+sf';

--$363,000,000 classes A-2-A/B notes 'AAAsf'; Outlook Stable;

--$199,880,000 class A-3 notes 'AAAsf'; Outlook Stable;

--$78,890,000 class B notes 'AAsf'; Outlook Stable;

--$97,930,000 class C notes 'Asf'; Outlook Stable;

--$96,300,000 class D notes 'BBBsf'; Outlook Stable.

Fitch does not expect to rate the class E notes.


Consistent Credit Quality: The 2016-4 pool displays consistent credit quality relative to recent pools based on the weighted average (WA) Fair Isaac Corp. (FICO) score of 576 and internal credit scores. Obligors with FICOs greater than 600 represent over 30% of the pool, up from AMCAR transactions issued prior to 2016.

Increased Extended-Term Contracts: 60+ month contracts total 92.4% of the pool, consistent with recent transactions. 73-75 month contracts total 3.3%, up slightly from 2016-3.

Performance data for these contracts are limited due to lack of seasoning. However, GMF offered the 73-75 month loans in this pool to obligors with stronger credit metrics. Given this fact and the small concentration in the pool, Fitch did not apply an additional stress to these loans.

Sufficient Credit Enhancement: Initial hard credit enhancement (CE) is consistent with 2016-3, totaling 35.20%, 27.95%, 18.95% and 10.10% for classes A, B, C and D, respectively. Excess spread is expected to be slightly higher than 2016-3 due to the higher WA annual percentage rate (APR) of the pool.

Stable Performance: Losses on GMF's managed portfolio and securitizations have been stable and relatively low, supported by the currently stable economy and healthy used vehicle values. Contrary to other nonprime lenders, recent vintage performance has not exhibited any notable weakness, with losses remaining stable for the 2013-2015 vintages to date. The cumulative net loss proxy for 2016-4 is 11.10%, down from 11.35% in 2016-3.

Improving Corporate Health: Fitch rates GM and GMF 'BBB-' with a Positive Rating Outlook. The recent affirmation and Rating Outlook revision to Positive reflect the ongoing fundamental improvement in the company's core business over the past several years.

Consistent Origination/Underwriting/Servicing: AFSI demonstrates adequate abilities as originator, underwriter and servicer as evidenced by historical portfolio and securitization performance. Fitch deems AFSI capable of adequately servicing the transaction.

Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of GMF would not impair the timeliness of payments on the securities.


Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case. This in turn could result in Fitch taking negative rating actions on the notes.

Fitch evaluated the sensitivity of the ratings assigned to AmeriCredit Automobile Receivables Trust 2016-4 to increased credit losses over the life of the transaction. Fitch's analysis found that the transaction displays some sensitivity to increased defaults and credit losses. This shows a potential downgrade of two categories under Fitch's moderate (1.5x base case loss) scenario, especially for the subordinate bonds. The notes could experience downgrades of three or more rating categories, potentially leading to distressed ratings (below 'Bsf'), or possibly default, under Fitch's severe (2.5x base case loss) scenario.


Fitch was provided with Form ABS Due Diligence-15E ("Form 15E") as prepared by Deloitte and Touche, LLP. The third-party due diligence described in Form 15E focused on comparing or recomputing certain information with respect to 225 loans from the statistical data file. Fitch considered this information in its analysis and the findings did not have an impact on our analysis/conclusions. A copy of the ABS Due Diligence Form-15E received by Fitch in connection with this transaction may be obtained through the link contained on the bottom of this rating action commentary.


A description of the transaction's representations, warranties and enforcement mechanisms ("RW&Es") that are disclosed in the offering document and which relate to the underlying asset pool is available by accessing the appendix referenced under "Related Research" below. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions,' dated May 31, 2016.