Press Release

DBRS Morningstar Rates Ally’s $450 million Issuance of Senior Notes at BBB (low), Negative Trend

Banking Organizations
December 03, 2020

DBRS, Inc. (DBRS Morningstar) assigned a rating of BBB (low) to the $450 million 1.450% Senior Notes due October 2, 2023 (the Notes), issued by Ally Financial Inc. (Ally or the Company). The trend on the Notes is Negative. These notes are a follow-on issuance of the $750 million aggregate principal amount of 1.450% Senior Notes due October 2, 2023 issued on September 18, 2020. The proceeds from the Notes issuance will be placed in the general funds of Ally and are available for general corporate purposes.

The Negative trend considers the difficult economic environment induced by the Coronavirus Disease (COVID-19) pandemic and the expectation that this will adversely impact Ally’s financial performance including material profitability pressures due to significantly lower auto loan originations and deterioration in credit quality. Nonetheless, notwithstanding the still challenging economic environment, in 3Q20, Ally's auto loan originations reached the Company’s highest quarterly volume in five years, and asset performance continues to outperform our expectations and is consistent with the current ratings.

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 and S&P Global Market Intelligence. 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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