Press Release

DBRS Morningstar Rates Ally’s $750 million Issuance of Senior Notes at BBB (low), Negative Trend

Banking Organizations
September 17, 2020

DBRS, Inc. (DBRS Morningstar) assigned a rating of BBB (low) to the $750.0 million 1.450% Senior Notes due October 2023 (the Notes), issued by Ally Financial Inc. (Ally or the Company). The trend on the Notes is Negative. The proceeds from the issuance of the Notes will be placed in the general funds of Ally and are available for general corporate purposes.

The Negative trend considers the recessionary environment induced by the Coronavirus Disease (COVID-19) and the expectation that this will adversely impact Ally’s financial performance. Specifically, we anticipate material profitability pressures due to the decline in auto loan originations and deterioration in the Company’s credit quality, including higher but manageable levels of delinquencies and charge-offs. That said, we expect the government’s significant monetary and fiscal support, as well as Ally’s deferral programs to limit the impact of these headwinds, but as these programs expire credit performance is likely to weaken should labor markets remain challenged.

Although an upgrade is not likely at this time, if Ally’s earnings and asset performance were to remain acceptable through the downturn, the long-term ratings trends would change back to Stable. Conversely, if the challenging operating environment created by the coronavirus pandemic becomes more protracted than expected, leading to materially weaker credit fundamentals, and/or a sustained material reduction in earnings generation, ratings would be downgraded.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at:

The Grid Summary Grades for Ally are as follows: Franchise Strength - Good ; Earnings Power - Moderate; Risk Profile – Good/Moderate; Funding & Liquidity – Good/Moderate: Capitalisation - Moderate.

All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (June 8, 2020):

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release:

The primary sources of information used for this rating include Company Documents. DBRS Morningstar considers the information available to it for the purposes of providing this rating was of satisfactory quality.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar’s outlooks and ratings are under regular surveillance.

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