Research Update: Ally Financial Inc. Upgraded To 'BBB-' On Strong Auto Finance Business And Underwriting; Outlook Stable

Ally Financial Inc. has transitioned further away from its legacy as a captive auto finance company to a full spectrum provider of consumer and commercial auto financing, while significantly increasing its deposits and direct banking customer base, improving its profitability, and maintaining good asset quality. We are raising our long-term issuer credit and unsecured debt ratings on Ally to 'BBB-' from 'BB+', our subordinated debt rating to 'BB+', and our preferred stock rating on GMAC Capital Trust I to 'BB-'. Separately, we now apply our criteria for banks, rather than our nonbank financial institutions criteria, to Ally because the company has increased the proportion of deposits in its funding mix and the majority of its assets are funded by its

...- Ally Financial Inc. has transitioned further away from its legacy as a captive auto finance company to a full spectrum provider of consumer and commercial auto financing, while significantly increasing its deposits and direct banking customer base, improving its profitability, and maintaining good asset quality. - We are raising our long-term issuer credit and unsecured debt ratings on Ally to '###-' from '##+', our subordinated debt rating to '##+', and our preferred stock rating on GMAC Capital Trust I to '##-'. - Separately, we now apply our criteria for banks, rather than our nonbank financial institutions criteria, to Ally because the company has increased the proportion of deposits in its funding mix and the majority of its assets are funded by its bank subsidiary. - The stable outlook reflects our expectation that Ally's auto finance and direct banking operations will remain resilient through economic and interest rate cycles and that it will maintain adequate capital and liquidity....

Research Update