DBRS Confirms Ally Retail Installment Obligations Transferor LLC

DBRS, Inc. (DBRS) confirmed the ratings on the ARIOT Lease, ARIOT Retail and ARIOT Wholesale facilities within the Ally Retail Installment Obligations Transferor LLC asset-backed security transaction at AA (sf), AAA (sf) and AA (sf), respectively.

RATING RATIONALE/DESCRIPTION
The rating rationale includes the following key analytical considerations:
-- Transaction capital structure, current ratings and form and sufficiency of available credit enhancement.
-- The transaction parties’ capabilities with regard to origination, underwriting and servicing.
-- The credit quality of the collateral pool and historical performance.
-- Amendment of the transaction.

The originator/servicer is rated BBB (low) with a Stable trend by DBRS.

The transaction contains three discrete facilities; retail auto, auto lease and wholesale. Credit enhancement for each facility is dynamic.

Prior to the amendment, performance of the three facilities was within expectations. Credit enhancement levels were at required levels and performance trigger events that would have required an increase in credit enhancement were well in compliance with their respective thresholds.

In addition to an extension of the facilities, the amendment involved the commitment amounts the overall facility, the revision of the retail facility matrix multiples and the adjustment of concentration limits. The multiples are based on loss projections of loan cohorts with similar credit characteristics. The cohort multiples are based on loss projections of loan cohorts with similar credit characteristics such as tenor, FICO score, loan-to-value ratio, new or used vehicle, credit tier, etc. Overall credit enhancement for the facility is the weighted average of the cohort multiples, adjusted for excess spread, and is subject to performance-based step-up triggers as well as a floor.

DBRS evaluated the three facilities within the transaction based on multiple analyses of potential pool compositions and deemed credit enhancement sufficient to cover DBRS’s expected losses on the three facilities at their current respective levels.

Notes:
The principal methodology is DBRS Master U.S. ABS Surveillance Methodology, which can be found on dbrs.com under Methodologies & Criteria.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS did not have access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

This rating is endorsed by DBRS Ratings Limited for use in the European Union. The following additional regulatory disclosures apply to endorsed ratings:

The last rating action on this transaction took place on March 9, 2018 when the ratings of ARIOT Retail, ARIOT Lease and ARIOT Wholesale facilities were confirmed at AAA (sf), AA (sf) and AA (sf), respectively.

For further information on DBRS historical default rates published by the European Securities and Markets Authority (“ESMA”) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Lead Analyst: Jayce Fox, Senior Vice President, US ABS Surveillance – Global Structured Finance
Rating Committee Chair: Erin Stafford, Managing Director, Head of North American CMBS
Initial Rating Date: March 14, 2016

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.

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