On the Dash:
- GM Financial privately sold $2 billion of prime auto loans, a rare move outside public markets.
- Goldman Sachs helped oversee the transaction, which appeals to growing investor interest in private credit.
- The deal comes as GM’s public issuance of asset-backed securities slows and private credit markets expand.
General Motors Financial Co. sold $2 billion of auto loans to private investors last quarter, marking a rare instance of the company turning to non-public markets for funding. The transaction was overseen by Goldman Sachs Group Inc., a source familiar with the matter told Bloomberg. The sale included loans made to prime borrowers with strong credit profiles.
The private sale reflects growing investor interest in high-quality private credit, which has expanded beyond traditional corporate lending to include mortgages, installment loans, and other forms of debt. Private credit funds have raised billions of dollars to invest in these assets, seeking safer returns compared with riskier corporate loans. Experts estimate the market for private credit could eventually reach $40 trillion, far surpassing today’s $1.7 trillion direct lending market.
GM Financial’s private deal stands out because the company is already a major issuer in public markets and regularly sells asset-backed securities, including a nearly $1 billion prime auto loan offering in August. Market participants note that while private sales are less common for large auto lenders, they can offer a faster path to funding and demonstrate to ratings firms that a company has multiple avenues for raising capital, which strengthens its credit profile.
The private loan sale comes amid a slowdown in GM’s public asset-backed securities issuance. So far in 2025, the company has sold $5 billion of ABS backed by auto loans, down from at least $8 billion annually over the previous five years. Its vehicle for selling bonds backed by subprime loans, the AmeriCredit Automobile Receivables Trust, has not completed any deals this year.
While private credit continues to attract investors, some Wall Street experts caution about potential risks. The opaque nature of shadow lending could hide underappreciated vulnerabilities, especially if economic growth slows.
