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AmeriCredit Corp. Apr 06
Standard & Poors, April 2006
Abstract
Reasonable capitalization relative to risk Adequate liquidity Expanding franchise Monoline subprime automobile lender High reliance on ABS as a funding source The ratings on AmeriCredit Corp. reflect the company's significant capital base and solid capitalization relative to the risk of its assets, adequate liquidity, and its expanding franchise. AmeriCredit's capital base of about $1.9 billion, which has been built up largely through earnings retention, provides a significant cushion for the current level of charge-offs inherent in its subprime automobile business model. The concentration in subprime auto markets limits the ratings because the credit quality of these loans is highly vulnerable to the economic cycle. AmeriCredit's continued dependence on ABS as a primary funding source also constrains the rating. To achieve...
Companies mentioned in this report are: General Motors Financial Co. Inc.
Action: Review
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Full Analysis
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