GM Financial Secures $2 Billion in Funding Through Private Loan Sale
DETROIT – GM Financial has completed a $2 billion private sale of auto loans, turning to non-public markets for funding, according to a report by Bloomberg. The transaction, overseen by Goldman Sachs Group Inc., involved loans made to prime borrowers with strong credit profiles.
The private sale highlights increasing investor appetite for high-quality private credit, an asset class that has broadened beyond conventional corporate lending to encompass mortgages, installment loans, and other debt instruments. Private credit funds have amassed billions of dollars to invest in thes assets, seeking comparatively safer returns than those offered by riskier corporate loans. industry estimates suggest the private credit market could ultimately reach $40 trillion, significantly exceeding the current $1.7 trillion direct lending market.
This deal is notable as GM Financial is a frequent issuer in public markets, recently completing a nearly $1 billion prime auto loan offering in August. Market observers point out that while private sales are less common for large auto lenders, they provide a quicker funding route and demonstrate to credit rating agencies a company’s diversified access to capital, bolstering its creditworthiness.
The move comes as GM Financial’s public asset-backed securities (ABS) issuance has slowed.Through 2025 to date,the company has sold $5 billion of ABS backed by auto loans,a decrease from annual sales of at least $8 billion over the prior five years. Furthermore,its vehicle for selling bonds backed by subprime loans,the AmeriCredit Automobile Receivables Trust,has not completed any deals this year.
Despite the growing popularity of private credit, some wall Street analysts are urging caution, citing the potential for hidden vulnerabilities within the less obvious “shadow lending” system, particularly in the event of an economic downturn.
