DBRS Canadian Structured Finance Comments on Strategic Plans Announced by Ally Financial

DBRS Canadian Structured Finance has today commented on the Strategic Actions Update presented by Ally Financial Inc. (Ally US; rated BB (low), Under Review with Developing Implications) in a conference call held by Ally US on May 15, 2012. As noted in its Strategic Actions Update, several initiatives are being pursued following the decision by Ally US’s wholly-owned mortgage subsidiary, Residential Capital, LLC (ResCap), to file a pre-packaged bankruptcy plan under Chapter 11 of the U.S. Bankruptcy Code. Concurrent with the ResCap announcement, Ally US announced that it was exploring strategic alternatives for all of its international operations, including auto finance, insurance, and banking and deposit operations in Canada, Mexico, Europe, the United Kingdom and South America.

DBRS notes that, at this time, all securities rated by DBRS that were issued as part of Canadian structured finance transactions sponsored by Ally Credit Canada Limited (Ally Canada) as Seller and Servicer and with Ally US as Performance Guarantor are performing well within the base case assumptions assessed on assignment of the respective ratings. This includes all of the currently outstanding series of term asset-backed securities issued by special purpose vehicles sponsored by Ally Canada (including CCARAT II and CCARAT III) and to the extent, if any, of currently outstanding transactions in the asset-backed commercial paper market. Information on the current performance of the CCARAT II and CCARAT III transactions is available in DBRS’s ABS Monthly Report at www.dbrs.com.

No specific plans for any divestitures from its international operations were announced, although Ally US did note that it had enlisted advisors regarding the strategic alternatives for these assets, and that this would play out over the remainder of this year.
DBRS will continue to monitor developments and assess the potential impact on ratings of the related securities arising from any changes to the obligations under the relevant transactions of Ally Canada, as Seller and Servicer, and Ally US, as Performance Guarantor. As relevant information becomes available, DBRS will take action as necessary.

Notes:
The principal applicable methodology is Rating Canadian Auto Loan Securitization, which can be found on the DBRS website under Methodologies.

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