GM Financial Automobile Leasing Trust 2020-1...Presale: GM Financial Automobile Leasing Trust 2020-1...

Presale:

GM Financial Automobile Leasing Trust 2020-1February 6, 2020

Preliminary Ratings

ClassPreliminaryrating Type Interest rate(i)

Preliminary amount(mil. $)

Expected legal finalmaturity date

A-1 A-1+ (sf) Senior Fixed 235.00 Feb. 22, 2021

A-2-A/A-2-B AAA (sf) Senior Fixed/floating(ii) 400.00(iii) April 20, 2022

A-3 AAA (sf) Senior Fixed 380.00 Dec. 20, 2022

A-4 AAA (sf) Senior Fixed 86.17 Dec. 20, 2023

B AA+ (sf) Subordinate Fixed 59.43 Dec. 20, 2023

C A+ (sf) Subordinate Fixed 55.33 Dec. 20, 2023

D A- (sf) Subordinate Fixed 34.16 June 20, 2024

Note: This presale report is based on information as of Feb. 6, 2020. The ratings shown are preliminary. Subsequent information may result inthe assignment of final ratings that differ from the preliminary ratings. Accordingly, the preliminary ratings should not be construed asevidence of final ratings. This report does not constitute a recommendation to buy, hold, or sell securities. (i)The actual coupons of thesetranches will be determined on the pricing date. (ii)The class A-2 notes may be split into fixed-rate class A-2-A and floating-rate class A-2-Bnotes. The sizes of classes A-2-A and A-2-B will be determined at pricing. The class A-2-B coupon will be expressed as a spread tied toone-month LIBOR. (iii)The principal amount of the class A-2-B notes is not expected to exceed $200 million.

Profile

Expected closing date Feb. 19, 2020.

Collateral Auto lease receivables.

Sponsor, servicer, and administrator AmeriCredit Financial Services Inc., doing business as GM Financial, a wholly ownedsubsidiary of General Motors Financial Co. Inc. (BBB/Stable/--).

Issuer GM Financial Automobile Leasing Trust 2020-1.

Titling trust ACAR Leasing Ltd.

Depositor GMF Leasing LLC.

Indenture trustee, administrativeagent, and collateral agent

Wells Fargo Bank N.A. (A+/Stable/A-1).

Owner trustee Wilmington Trust Co. (A/Stable/A-1).

Lead underwriter J.P. Morgan Securities LLC.

Presale:

GM Financial Automobile Leasing Trust 2020-1February 6, 2020

PRIMARY CREDIT ANALYST

Linda Yeh

New York

(1) 212-438-2520

[email protected]

SECONDARY CONTACT

Jennie P Lam

New York

(1) 212-438-2524

[email protected]

www.standardandpoors.com February 6, 2020 1

© S&P Global Ratings. All rights reserved. No reprint or dissemination without S&P Global Ratings' permission. See Terms of Use/Disclaimeron the last page.

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mailto: [email protected]




Credit Enhancement Summary(i)

GMALT

2020-1 2019-3

Rating

Class A A-1+ (sf)/AAA (sf) A-1+ (sf)/AAA (sf)

Class B AA+ (sf) AA+ (sf)

Class C A+ (sf) A+ (sf)

Class D A- (sf) A- (sf)

Subordination (%)

Class A 10.90 10.90

Class B 6.55 6.55

Class C 2.50 2.50

Class D N/A N/A

Overcollateralization (%)

Initial 8.50 8.50

Target(ii) 11.00 11.00

Reserve account (%)

Initial 0.50 0.50

Target 0.50 0.50

Total initial hard credit enhancement (%)

Class A 19.90 19.90

Class B 15.55 15.55

Class C 11.50 11.50

Class D 9.00 9.00

Total target hard credit enhancement (%)(iii)

Class A 22.40 22.40

Class B 18.05 18.05

Class C 14.00 14.00

Class D 11.50 11.50

Estimated excess spread per year (%)(iv) 3.5 3.7

Discount rate (%) 6.75 6.75

Initial aggregate securitization value ($) 1,366,219,095 1,093,238,377

Total securities issued ($) 1,250,090,000 1,000,310,000

(i)All percentages are based on the initial aggregate securitization value. (ii)The target overcollateralization of 11.00% of the initial receivableswill decrease to 10.00% after the class A-2-B notes are fully paid off. If the class A-2-B notes are not issued, the target amount ofovercollateralization on any payment date will equal 10.00% of the aggregate securitization value as of the cutoff date. (iii)The total target creditenhancement will step down by 100 basis points in each rating category after the class A-2-B notes are fully paid off or if no class A-2-B notesare issued, the total hard credit enhancement will decrease by 100 basis points in each rating category. (iv)The 2020-1 annual excess spreadestimate reflects current coupon guidance, whereas the 2019-3 percentage reflect final pricing. GMALT--GM Financial Automobile LeasingTrust. N/A--Not applicable.



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Presale: GM Financial Automobile Leasing Trust 2020-1

Rationale

The preliminary ratings assigned to GM Financial Automobile Leasing Trust 2020-1's (GMALT2020-1's; the issuer's) $1.25 billion asset-backed notes reflect:

- The availability of approximately 24.9%, 20.8%, 17.0%, and 14.7% credit support for the classA, B, C, and D notes, respectively, in the form of 10.90%, 6.55%, and 2.50% subordination forthe class A, B, and C notes, respectively; 8.50% initial overcollateralization, growing to a targetof 11.00% (10.00% if no class A-2-B notes are issued), which will step down to (or remain at)10.00% once the class A-2-A and A-2-B (if issued) notes are paid in full; the nonamortizing0.50% reserve account; and excess spread (all percentages are expressed as a percentage ofthe initial securitization value).

- Our expectation that under a moderate 'BBB' stress scenario, all else being equal, our ratingson the class A notes would not be lowered, the rating on the class B notes would remain withinone rating category, and the ratings on the class C and D notes would remain within two ratingcategories of the assigned preliminary ratings. These rating movements are within thetolerance outlined in our credit stability criteria. (see "Methodology: Credit Stability Criteria,"published May 3, 2010).

- The credit quality of the underlying collateral, which consists of auto lease receivables thathave a weighted average FICO score of 773.

- The diversified mix of vehicle models in the pool.

- The expected timing of the residuals' maturities.

- The historical retention values of the vehicles in the pool.

- Automotive Lease Guide's (ALG's) forecast of each vehicle's residual value at lease inceptionand of current residuals.

- The timely interest and full principal payments by the notes' legal final maturity dates madeunder cash flow scenarios that we stressed for credit and residual losses, which are consistentwith the preliminary ratings assigned to the notes.

- The transaction's payment and legal structures.

Our expected credit loss for the GMALT 2020-1 pool is 0.80% of the securitization value, whichreflects our review of the static pool loss data for GM Financial lease originations, credit lossperformance on GMALT securitizations, peer collateral comparisons, and our macroeconomicoutlook of declining recoveries. Our 'AAA', 'AA+', 'A+', and 'A-' stress scenarios for credit loss areapproximately 4.0%, 3.6%, 2.7%, and 2.1%, respectively, of the securitization value.

Our 'AAA', 'AA+', 'A+', and 'A-' residual stresses for the GMALT 2020-1 pool are approximately27.2%, 24.1%, 18.5%, and 16.1%, respectively, of the pool's aggregate undiscounted baseresidual value. In deriving our residual stress, we compared ALG's residual value forecast at leaseorigination for a majority of the GMALT 2020-1 pool by vehicle type and term, vehicle make andterm, and vehicle model with the quarterly mark-to-market of ALG's forecast, which the issuerprovided. We also considered the pool's residual maturity profile, the vehicle concentration, thevehicle segment concentration, the consistency of ALG's residual forecasts regarding thehistorical retention values of General Motors Co. (GM) vehicles (Chevrolet, GMC, Cadillac, andBuick), and our economic and industry outlooks (see the S&P Global Ratings' Expected Credit AndResidual Losses section for more information).



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Our total stressed losses (credit and residual) are approximately 22.5%, 20.1%, 15.6%, and 13.5%for the 'AAA', 'AA+', 'A+', and 'A-' rated notes, respectively, as a percentage of the initial aggregatesecuritization value. The credit enhancement outlined above (and in the Cash Flow Modelingsection) provides adequate support for our assigned preliminary ratings.

Transaction Overview

GMALT 2020-1 is GM Financial's first publicly placed auto lease term securitization this year andits 18th overall auto lease term transaction. It is also the 13th auto lease transaction from GMFinancial that we have rated.

The receivables backing the GMALT 2020-1 pool will consist of the monthly lease payments andbase residual values (as defined in the Residual Value section) of a pool of lease contractsoriginated by GM dealers. The leased vehicles will consist primarily of new GM-brand passengercars, sport utility vehicles (SUVs), crossover utility vehicles (CUVs), and light-duty trucks. As withprior GMALT securitizations, series 2020-1 includes nonamortizing subordination for the seniornotes, a nonamortizing reserve account amount, and an initial overcollateralization with targetlevels that step down by 100 basis points after full repayment of the class A-2-A and A-2-B notes(or nonamortizing if no class A-2-B notes are issued).

The issuing trust will issue four class A notes, as well as class B, C, and D notes. The class A-2notes may be split into two tranches. Class A-2-A will be issued as fixed-rate notes, and classA-2-B will be issued as floating-rate notes. The principal allocation between the two tranches willbe determined by the pricing date; however, the maximum class A-2-B size is not expected toexceed $200 million, which we modeled in our cash flow scenarios. To test the structure further,we also modeled it as if all of the bonds pay a fixed rate of interest.

The series 2020-1 transaction documents include fallback language that closely follows therecommended contractual language published on May 31, 2019, by the Federal Reserve'sAlternative Reference Committee (ARRC) for new issuances of LIBOR securitizations. In the eventof a LIBOR cessation and occurrence of a benchmark transition event, both defined in thetransaction documents and by ARRC, the class A-2-B floating rate will be allowed to transitionfrom LIBOR as a benchmark rate. We will continue to monitor the events related to this topic asthey evolve and evaluate the potential impact to our ratings, if any.

Changes From The Series 2019-3 Transaction

There were no material changes in the credit enhancement from the GMALT 2019-3 transaction.

The changes in the collateral composition from series 2019-3 include the following:

- The percentage of leases with an original term greater than 24 months but up to 36 monthsincreased to 46.5% from 45.3%.

- The percentage of leases with an original term greater than 42 months but less than or equal to48 months increased to 7.1% from 5.8%.

- The percentage of cars decreased to 7.9% from 10.7%.

Overall, the series 2020-1 pool is generally similar to the 2019-3 pool and we maintained ourexpected cumulative net credit loss at 0.80%, reflecting, in our view, the strong creditperformance of prior GMALT transactions and the strong credit characteristics of series 2020-1similar to prior GMALT transactions.



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Legal Structure

GM Financial makes loans to ACAR Leasing Ltd. (the titling trust), which allows the titling trust topurchase leases and leased vehicles from GM dealers. The leased vehicles are titled in the titlingtrust's name.

On the series 2020-1 transaction's closing date, the titling trust will issue an exchange note (theseries 2020-1 exchange note) to GM Financial that is secured by the series 2020-1 designatedpool of leases and the related leased vehicles. GM Financial will sell the exchange note to GMFLeasing LLC, the depositor, in a true sale. The depositor will then transfer and assign the exchangenote to GMALT 2020-1, a newly formed Delaware statutory trust and the issuing entity, inexchange for the asset-backed notes, which will represent the issuing entity's obligations (seechart 1). The issuing entity will pledge and assign the exchange note to the indenture trustee,which will hold a first-priority, perfected security interest in the exchange note for the series2020-1 noteholders' benefit. GM Financial is the servicer for the leases and the related leasedvehicles held by the titling trust and will continue to service them under GMALT 2020-1.



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Chart 1

In rating this transaction, S&P Global Ratings will review the legal matters that it believes arerelevant to its analysis, as outlined in its criteria.

Pension Benefit Guaranty Corp. (PBGC) Risk

GM Financial uses a collateral agent, Wells Fargo Bank N.A., to hold a security interest in all newlyoriginated leases and leased vehicles for GM Financial's and the exchange noteholders' benefit.The security interest in the leases is perfected by filings under the Uniform Commercial Code, andthe security interest in the leased vehicles is perfected by a notation on each vehicle's certificateof title under state motor vehicle registration laws.

S&P Global Ratings expects to receive an opinion of counsel to the issuer, subject to customaryassumptions and qualifications, to the effect that the collateral agent's security interest in theleases and leased vehicles would be before a lien in favor of PBGC and the notice of which will be



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filed after the series 2020-1 notes are issued. A PBGC lien could be imposed against the assets ofany member of the GM-controlled group in the event of unpaid minimum contributions to adefined benefit pension plan required by law or if an underfunded defined benefit pension planterminates.

Payment Structure

On each payment date, the servicer is entitled to receive its fee of 1.00% per annum for itsperformance during the previous collection period. In addition, on each payment date before thenotes have been accelerated following an event of default, the indenture trustee will makedistributions from available funds according to the payment priority shown in table 1. Principal onthe notes will be paid sequentially.

Table 1

Payment Waterfall (Before Acceleration Following An Event Of Default)

Priority Payment

1 To any successor servicer, unpaid transition fees up to $200,000; to the indenture and ownertrustees, fees, expenses, and indemnities up to $100,000 and $100,000, respectively, per year; andto the asset representations reviewer, up to $200,000 per year.

2 Interest on the class A notes, pari passu.

3 Principal on the class A notes, sequentially, until the class A note balance reaches parity with theaggregate securitization value as of the end of the previous collection period.

4 The remaining principal balance of any class A notes on their respective final scheduleddistribution date.

5 Interest on the class B notes.

6 Principal on the class A and B notes until their combined note balance reaches parity with theaggregate securitization value as of the end of the previous collection period.

7 The remaining principal balance of the class B notes on their final scheduled distribution date.

8 Interest on the class C notes.

9 Principal on the class A, B, and C notes until their combined note balance reaches parity with theaggregate securitization value as of the end of the previous collection period.

10 The remaining principal balance of the class C notes on their final scheduled distribution date.

11 Interest on the class D notes.

12 Principal on the class A, B, C, and D notes until their combined note balance reaches parity with theaggregate securitization value as of the end of the previous collection period.

13 The remaining principal balance of the class D notes on their final scheduled distribution date.

14 The noteholders' principal distributable amount (the paydown of the pool over the currentcollection period), paid sequentially.

15 The reserve account, up to its required level.

16 Pay principal to achieve the target overcollateralization.

17 Any unpaid fees and expenses due to the successor servicer, indenture and owner trustees, andasset representations reviewer.

18 All remaining amounts to the certificateholder.

On each payment date after a monetary event of default occurs, after the acceleration of the notesfollowing an event of default, or after the liquidation of the trust estate, the indenture trustee will



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distribute the available funds according to the payment priority shown in table 2.

Table 2

Payment Waterfall (After Acceleration Following An Event Of Default)

Priority Payment

1 Any amounts due and owing to any successor servicer, the indenture and owner trustees, andthe asset representations reviewer, without regard to any caps.

2 To the class A noteholders, the note interest amounts, pro rata.

3 To the class A-1 noteholders, the outstanding principal amount of the class A-1 notes until paidin full and then, pro rata to the class A-2, A-3, and A-4 noteholders, the outstanding principalamount of each class until paid in full.

4 To the class B noteholders, the note interest amounts.

5 To the class B noteholders, the outstanding principal amount of the class B notes until paid infull.

6 To the class C noteholders, the note interest amounts.

7 To the class C noteholders, the outstanding principal amount of the class C notes until paid infull.

8 To the class D noteholders, the note interest amounts.

9 To the class D noteholders, the outstanding principal amount of the class D notes until paid infull.

10 To the noteholders, any other amount due and owing under the program documents and notpreviously distributed.

11 All remaining amounts to the certificateholder.

Residual Value

The series 2020-1 pool will be secured by the series 2020-1 exchange note, which is backed by apool of leases (and the related leased vehicles) with a securitization value totaling $1,366,219,095.The leases' securitization value is the sum of the present value of each lease's remaining monthlylease payment and the related leased vehicle's base residual value (both discounted at the higherof 6.75% and the contract annual percentage rate). Each leased vehicle's base residual value willequal the lowest of:

- The contract residual value set by GM Financial;

- The residual value estimate established by ALG at the lease contract's inception; and

- ALG's current residual value estimate as of December 2019.

The contract residual value is the residual value that is assigned to the vehicle at the lease'sinception (as stated in the lease contract), which, in turn, determines the monthly payments forthe individual lease. The contract residual value is typically set higher than ALG's residual value atlease inception (a process called lease subvention) to reduce the lease payments the lessee owesunder the lease contract. The base residual value provides a more conservative estimate of thevehicle's future value, which helps mitigate the noteholders' exposure to the losses associatedwith lease subvention. The GMALT 2020-1 pool's undiscounted base residual value is$1,008,368,821, or 73.81% of the pool's securitization value.



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Managed Portfolio

As of Dec. 31, 2019, GM Financial's total U.S. portfolio of retail lease contracts consisted of1,473,651 contracts totaling approximately $43.1 billion, an approximately 4% decline from a yearearlier (see table 3). Since 2012, GM Financial's lease portfolio has experienced strong growth,more than doubling each year between 2012 and 2015. Total 30-plus-day delinquencies andrepossessions have remained low and relatively consistent since 2013. Net losses as a percentageof average value of leases outstanding has increased slightly to 0.33% for year end Dec. 31, 2019,from 0.28% a year earlier.

Table 3

Total Managed Portfolio

Year ended Dec. 31

2019 2018 2017 2016 2015 2014

Lease contracts outstanding (mil.$)

43,106.15 44,995.57 38,016.40 35,658.15 20,367.58 5,955.50

Avg. dollar amount of leasesoutstanding (mil. $)

44,100.38 45,091.84 39,672.89 29,232.37 13,050.07 3,941.16

No. of contracts outstanding 1,473,651 1,573,913 1,346,532 1,212,137 692,596 226,719

30-plus-day delinquencies (%)(i) 1.03 1.30 1.44 1.24 1.27 1.65

Repossessions (%)(i) 1.25 1.59 1.80 1.03 0.60 0.92

Net losses (%)(ii) 0.33 0.28 0.29 0.23 0.17 0.28

Vehicles returned to GMF (%)(iii) 74.40 76.51 93.38 68.83 69.00 68.90

Total loss/(gain) on ALG residualson vehicles returned to GMF (%)(iv)

(7.25) (12.93) (7.96) (6.29) (8.96) 0.07

(i)As a percentage of the number of contracts outstanding. (ii)As a percentage of the average value of leases outstanding. (iii)As a percentage ofthe number of contracts scheduled to terminate. (iv)As a percentage of ALG's residual value of returned vehicles sold by GMF. GMF--GMFinancial Co. Inc. ALG--Automotive Lease Guide.

GM Financial's lease program is still relatively young, so the portfolio data exhibit some volatility.For the year ended Dec. 31, 2019, GM Financial experienced total gains of 7.25% on ALG residualson returned vehicles compared with 12.93% of gains for the same period in 2018.

Securitization Performance

GM Financial's series 2014-1 through 2017-1 paid off with a cumulative net credit loss range of0.14%-0.33% (see chart 2). The remaining outstanding securitizations--series 2017-2 to 2019-3,with five to 31 months of performance data--are currently experiencing low losses (see chart 3).We did not rate series 2014-1, 2014-2, 2015-1, 2016-3, and 2017-3.



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Chart 2

Chart 3

The paid-off transactions--GMALT 2014-1 through 2017-1--experienced cumulative residualgains in the range of 3.44%-7.55% on vehicles returned and sold as a percentage of the initialbase residual (see chart 4). The outstanding series are realizing cumulative residual gains as a



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percentage of the initial base residual (see chart 5).

Chart 4

Chart 5

On March 12, 2019, we lowered our credit loss expectations on GMALT 2017-1 and 2017-2 (seetable 4 and "Four Ratings Raised, Eight Ratings Affirmed On GM Financial Automobile Leasing



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Trust 2017-1 and 2017-2," published March 12, 2019). Since then, series 2017-1 has paid-off witha cumulative net credit loss of 0.14% and a residual gain of 6.78% of initial base residual value.

Table 4

Collateral Performance (%)

As of the January 2020 distribution date

Series Mo.Pool

factorCurrent

CNL(i)Original lifetime

CNL exp.Revised lifetime CNL

exp.(ii)Current cumulative residual

loss/(gain)(iii)

2017-2 31 21.24 0.14 1.15 0.40 (5.10)

2018-1 23 41.21 0.10 0.90 -- (3.52)

2018-2 19 49.85 0.06 0.90 -- (3.19)

2018-3 16 57.26 0.12 0.80 -- (2.47)

2019-1 11 74.50 0.09 0.80 -- (1.33)

2019-2 9 80.57 0.11 0.80 -- (0.83)

2019-3 5 88.44 0.09 0.80 -- (0.38)

(i)Percentage of the initial aggregate securitization value. (ii)As of March 2019. (iii)Percentage of the initial aggregate base residual value.CNL—Cumulative net loss.

Collateral Analysis

The GMALT 2020-1 pool consists of 55,703 auto lease receivables with a weighted average FICOscore of 773 (see table 5). The top five vehicle series account for approximately 52.0% of thesecuritization value and 52.5% of the undiscounted base residual. Leases with original terms of 36months or less make up approximately 52.7% of the pool. Passenger cars account forapproximately 7.9% of the pool, and SUVs and CUVs make up approximately 70.5%.



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Table 5

Original Pool Characteristics

GMALT 2020-1 GMALT 2019-3 GMALT 2019-2 GMALT 2019-1 GMALT 2018-3 GMALT 2018-2 GMALT 2018-1GMALT

2017-3(i) GMALT 2017-2

No. of leases 55,703 45,277 56,694 55,040 56,655 56,084 56,399 45,285 53,085

Aggregatesecuritization value($)

1,366,219,095 1,093,238,377 1,366,625,322 1,332,675,534 1,362,465,324 1,362,697,503 1,362,401,046 1,090,137,186 1,362,471,925

Avg. securitizationvalue ($)

24,527 24,146 24,105 24,213 24,048 24,297 24,156 24,073 25,666

Base residual value($)

1,008,368,821 810,791,750 1,009,711,895 989,423,236 1,026,114,412 1,011,449,634 1,003,833,322 796,749,816 950,369,730

Avg. base residualvalue ($)

$18,103 $17,907 17,810 17,976 18,112 18,035 17,799 17,594 17,903

Base residual valueas a % of theaggregatesecuritization value

73.8 74.2 73.9 74.2 75.3 74.2 73.7 73.1 69.8

New vehicles (%) 100 100 100 100 100 100 100 100 100

Vehicle types (%)

Car 7.9 10.7 12.3 13.7 15.6 17.3 18.2 21.2 22.7

CUV 59.2 58.1 53.6 52.5 51.8 50.5 51.7 49.0 45.2

SUV 11.3 11.4 12.7 12.7 12.3 12.1 10.3 11.0 13.9

Truck 21.6 19.8 21.4 21.1 20.3 20.1 19.8 18.8 18.2

Minivan/stationwagon

-- -- -- -- -- -- -- -- --

Brand (%)

Chevrolet 56.3 56.3 56.9 54.3 52.1 50.3 52.8 53.3 51.4

GMC 19.2 19.2 19.9 19.9 21.0 20.4 19.7 21.0 20.3

Cadillac 15.7 15.4 14.3 16.1 16.6 17.7 16.1 14.4 17.4

Buick 8.9 9.1 8.9 9.7 10.4 11.7 11.4 11.3 11.0

Top five by vehicle series (% of securitization value)

Equinox=18.2 Equinox=19.0 Equinox=17.2 Equinox=15.2 Equinox=12.9 Silverado=12.4 Equinox=13.1 Equinox=13.7 Equinox=11.4

Silverado=12.8 Silverado=11.4 Silverado=12.4 Silverado=13.0 Silverado=12.7 Equinox=11.6 Silverado=12.3 Silverado=11.5 Silverado=11.1

Traverse=8.1 Traverse=8.1 Traverse=7.7 Traverse=7.3 Traverse=7.6 XT5=7.7 Traverse=7.1 Terrain=6.7 Malibu=6.0

XT5=6.8 Terrain=6.6 Terrain=6.6 XT5=7.1 XT5=7.2 Traverse=6.9 XT5=7.0 Cruze=6.4 Traverse=5.8

Terrain=6.0 XT5=6.7 XT5=6.0 Terrain=6.2 Acadia=6.2 Acadia=6.7 Acadia=6.5 Acadia=5.8 Escalade=5.7

Total 52.0 51.8 49.9 48.8 46.6 45.4 45.8 44.1 39.8

Top five by vehicle series (% of base residual)

Equinox=18.2 Equinox=19.0 Equinox=17.1 Equinox=15.2 Silverado=13.8 Silverado=13.7 Silverado=13.6 Equinox=14.5 Silverado=12.4

Silverado=13.7 Silverado=12.4 Silverado=13.5 Silverado=14.1 Equinox=13.1 Equinox=11.8 Equinox=13.5 Silverado=12.6 Equinox=11.6

Traverse = 8.1 Traverse=7.9 Traverse=7.5 Traverse=7.1 Traverse=7.4 XT5=7.2 Traverse=7.0 Terrain=7.1 Terrain=5.7

XT5=6.5 Terrain=6.6 Terrain=6.6 XT5=6.7 XT5=6.7 Acadia=6.8 XT5=6.5 Cruze=6.6 Malibu=5.6



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Table 5

Original Pool Characteristics (cont.)

GMALT 2020-1 GMALT 2019-3 GMALT 2019-2 GMALT 2019-1 GMALT 2018-3 GMALT 2018-2 GMALT 2018-1GMALT

2017-3(i) GMALT 2017-2

Terrain=5.9 XT5=6.4 XT5=5.7 Terrain=6.2 Acadia=6.3 Traverse=6.7 Acadia=6.4 Acadia=5.7 Escalade=5.6

Total 52.5 52.2 50.4 49.3 47.3 46.1 46.9 46.5 40.9

Weighted avg.original term (mos.)

37 37 37 37 37 37 36 36 38

Weighted avg.remaining term(mos.)

24 24 24 24 23 24 27 27 29

Weighted avg.seasoning (mos.)

13 13 13 13 13 13 9 9 9

Original lease term (%)

Less than orequal to 36mos.

52.7 53.8 50.4 51.9 53.0 45.6 57.1 46.8 30.9

37-48 mos. 47.3 46.2 49.6 48.1 47.0 54.4 42.9 53.2 69.1

49-60 mos. -- -- -- -- -- -- -- -- --

Weighted avg.FICO score

773 774 763 775 772 772 759 760 758

Top four state concentrations (%)

MI=23.9 MI=23.5 MI=21.8 MI=22.2 MI=22.8 MI=21.3 MI=30.0 MI=25.0 MI=18.5

NY=14.7 NY=15.0 NY=14.8 NY=14.4 NY=14.3 NY=14.2 NY=12.0 NY=12.5 NY=13.6

OH=8.0 OH=7.7 OH=7.7 OH=7.5 OH=7.5 OH=7.4 CA=9.5 OH=7.4 FL=7.8

FL=7.1 FL=7.1 FL=7.4 CA=7.0 CA=7.1 FL=7.4 FL=7.2 FL=6.8 OH=7.1

(i)Not rated by S&P Global Ratings. GMALT--GM Financial Automobile Leasing Trust. N/A--Not applicable.

Collateral Residual Timing

The leases in the GMALT 2020-1 pool are scheduled to mature as shown in table 6.

Table 6

GMALT 2020-1 Lease Maturity Profile By Year(i)

Year (%)

2020 11.2

2021 32.5

2022 53.6

2023 2.7

(i)Percentage of the aggregate undiscounted base residual value. GMALT--GM Financial Automobile Leasing Trust.

The pool is diversified in terms of monthly residual maturities. Leases will mature each monthbeginning in April 2020 (see chart 6). Residual maturities in the pool exceed 5.0% in May, June,



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August, and September 2022. The highest percentage of base residual maturities in any three-and six-month period is 18.0% and 33.2%, respectively, in September 2022. Approximately 14.4%of the residuals are likely to mature within the first 12 months of closing, and 46.8% and 97.7%are anticipated to mature within 24 and 36 months of closing, respectively, with the remaining2.3% coming due within 43 months of closing. This back-end risk is mitigated by our residualstresses and the transaction's sequential payment structure, whereby the overcollateralizationtarget and reserve account target amounts will not amortize until all of the notes are paid in full.

Chart 6

S&P Global Ratings' Expected Credit And Residual Losses

GMALT 2020-1 has two principal risk components: credit and residual risks.

Credit risk

The obligor's credit profile determines the credit risk. To derive the base-case credit loss for theseries 2020-1 transaction, we examined the static pool losses on GM Financial's lease portfoliooriginations segmented by credit profile and by credit profile and lease term, as well as theavailable GMALT securitization credit loss static pool performance. We considered the GMALT2020-1 pool's collateral credit quality, GM Financial's overall managed portfolio performance,collateral, and performance comparisons with peers, and the current economic conditions. Basedon this information, we expect the GMALT 2020-1 pool's cumulative net credit loss will be 0.80%of the pool's securitization value, unchanged from the prior transaction.

Residual risk

We examined and assessed residual risk on the GMALT 2020-1 pool according to our auto leasecriteria, "Revised General Methodology And Assumptions For Rating U.S. ABS Auto Lease



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Securitizations," published Nov. 29, 2011.

In our analysis of the series 2020-1 pool's base residual value, we considered the followingfactors:

- The historical stability of GM's used vehicle values;

- The consistency of ALG's historical forecasts versus the actual historical used vehicle values;

- Brand perception;

- The residual performance and forecast of the top 10 vehicle models (Equinox, Silverado,Traverse, XT5, Terrain, Acadia, Sierra, Escalade, Encore, and Trax), which make upapproximately 72.7% of the pool's total base residual value; and

- Our macroeconomic outlook.

Based on these factors, we did not adjust the base residual value. The haircuts that we applied tothe base residual value are below.

Base haircut

According to our auto lease criteria, we first applied an initial haircut to the series 2020-1 pool'sbase residual value commensurate with each rating scenario as shown in table 7.

Table 7

Base Residual Haircut

Scenario (preliminary rating)

AAA (sf) AA+ (sf) A+ (sf) A- (sf)

Base haircut as a % of undiscounted base residual value. 26.0 23.0 17.7 15.3

Excess concentration haircut

In addition to the aforementioned base haircut, we applied a haircut to the amount ofnondefaulted lease residuals exceeding the concentration limits applicable to the benchmark pool(excess concentrations) as outlined in our auto lease criteria. The haircut applied to excessconcentrations commensurate with each rating scenario is shown in table 8.

Table 8

Additional Excess Concentration Haircut(i)



Haircut applied to the excess concentration as a % of the undiscountedbase residual value.

13.0 11.5 9.0 7.8

The GMALT 2020-1 pool has an excess concentration of 3.7%, resulting from the four months withresidual maturities exceeding the 5.0% monthly threshold. There is also an excess concentrationof 5.6% as a result of the new and discontinued models exceeding the 10.0% threshold. The pool isdiversified by vehicle type concentration; therefore, we did not apply an additional haircut on it.The 9.3% total excess concentration is multiplied by the relevant haircut to arrive at the additionalhaircut percentage at each rating category (see table 9).



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Table 9

Benchmark Pool Excess Concentrations

GMALT2020-1

Benchmark poolconcentration limit Excess concentration

One-month maturity exceeding the benchmark (% of undiscounted base residual)

May 2022 5.45 5.00 0.45

June 2022 5.02 5.00 0.02

August 2022 5.74 5.00 0.74

September 2022 7.50 5.00 2.50

Individual model (top model=Equinox) (%) 18.21 20.00 0.00

Full-size and mid-size SUVs, full-size pickuptrucks, and vans (%)

29.76 30.00 0.00

Compact and hybrid cars (%) 3.85 30.00 0.00

New and discontinued models (%) 15.57 10.00 5.57

Total excess concentration (%) -- -- 9.28

GMALT--GM Financial Automobile Leasing Trust.

Speculative-grade manufacturer haircut

When determining the stress that applies to the adjusted base residual value, we take intoaccount the auto manufacturer's creditworthiness. Our auto lease criteria apply haircuts to thebase residual value of the vehicles produced by manufacturers with speculative-grade issuercredit ratings (i.e., 'BB+' or lower).

GM is the manufacturer of the leased vehicles backing the GMALT 2020-1 pool. The currentlong-term issuer credit rating on the company is 'BBB'. Based on the issuer credit rating on GM,we do not need to apply a speculative-grade manufacturer haircut to the series 2020-1transaction under our current auto lease criteria.

Low diversification haircut

For pools with low diversification, as described in our auto lease criteria, we will apply a lowdiversification haircut factor of 1.25x in addition to the aforementioned haircuts. Our auto leasecriteria describe the six conditions for which, if met by the securitized lease pool, we would applythis type of haircut. These conditions are:

- More than 20.0% of the residuals mature in any one month;

- More than 50.0% of the residuals mature in any three months;

- The pool contains three or fewer individual models;

- The pool contains more than 75.0% of full-size and mid-size SUVs, full-size pickup trucks, andfull-size vans combined;

- The pool contains more than 75.0% of compact and hybrid cars combined; and

- The pool contains more than 20.0% of new and discontinued models combined.

The GMALT 2020-1 pool does not meet any of these six conditions; therefore, we did not apply thelow diversification haircut.



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After analyzing the GMALT 2020-1 lease pool, applying the relevant residual value haircuts, andassessing a stressed return rate of 100%, which represents the loss frequency on nondefaultedleased vehicles, our stressed residual loss under each rating scenario is shown in table 10.

Table 10

Stressed Residual Loss



Residual haircut as a % of undiscounted base residual 26.0 23.0 17.7 15.3

Additional excess concentration haircut (%)(i) 1.2 1.1 0.8 0.7

Total residual haircut as a % of base residual value 27.2 24.1 18.5 16.1

Total residual haircut as a % of securitization value 18.5 16.5 12.9 11.3

(i)The excess concentration haircuts are derived by multiplying the total excess concentration calculated in table 9 by each of the ratingcategory haircuts shown in table 8.

Cash Flow Modeling

We tested GMALT 2020-1's proposed structure using cash flow scenarios to determine if thecredit enhancement level was sufficient to pay timely interest and principal in full by the notes'legal final maturity dates under our stress scenarios.

We modeled the transaction to simulate a stress scenario commensurate with the assignedpreliminary ratings. We modeled two scenarios; one is assuming a $200 million class A-2-B size,and the other is assuming an all-fixed class A-2. We assumed a 100% vehicle return rate on thenondefaulting leases and no prepayments. The results show that the preliminary rated notes areenhanced to the degree necessary to withstand a level of stressed credit and residual losses thatis consistent with the assigned preliminary ratings. For example, the preliminary 'AAA (sf)' ratednotes can withstand a cumulative net credit loss of 4.0% of the securitization value (orapproximately 5x our expected loss level of 0.8%) and residual losses of 18.5% of thesecuritization value for a total stress loss of 22.5% (see table 11).

Table 11

Cash Flow Assumptions And Results

Class

A B C D

Scenario (preliminary rating) AAA (sf) AA+ (sf) A+ (sf) A- (sf)

Cumulative net loss (%) 0.8 0.8 0.8 0.8

Cumulative net loss timing (mos.) 12/24/36 12/24/36 12/24/36 12/24/36

Cumulative net loss (%) 40/80/100 40/80/100 40/80/100 40/80/100

Voluntary prepayments (%) 0.0 0.0 0.0 0.0

Recoveries (%) 50.0 50.0 50.0 50.0

Recovery lag (mos.) 4 4 4 4

Residual haircut

Total residual haircut as a % of the undiscounted baseresidual value

27.2 24.1 18.5 16.1



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Table 11

Cash Flow Assumptions And Results (cont.)

Class

A B C D

Total residual haircut as a % of the securitization value 18.5 16.5 12.9 11.3

Total residual haircut as a % of the MSRP 12.4 10.9 8.4 7.3

Vehicle return rate (%) 100.0 100.0 100.0 100.0

Residual realization lag (mos.) 2 2 2 2

Result

S&P Global Ratings' stressed credit and residual loss as a% of the securitization value

22.5 20.1 15.6 13.5

Approximate credit enhancement available based on S&PGlobal Ratings' credit stress and break-even residualstress as a % of the securitization value

24.9 20.8 17.0 14.7

MSRP--Manufacturer's suggested retail price.

Sensitivity Analysis

In addition to running stressed cash flows to analyze the amount of credit and residual lossesGMALT 2020-1 can withstand, we ran a sensitivity analysis on both scenarios to determine howcredit and residual losses, which are in line with a moderate stress scenario, or a 'BBB' ratingstress, could affect our ratings on the notes. According to our ratings stability criteria, we will notassign a preliminary 'AAA (sf)' or 'AA (sf)' rating if we believe that the rating would decline by morethan one rating category in the first year during a moderate stress scenario, and we will not assigna preliminary 'A (sf)' or 'BBB (sf)' rating if we believe that the rating would decline by more than tworating categories in the first year. (see "Methodology: Credit Stability Criteria," published May 3,2010).

In our view, under the 'BBB' moderate stress scenario, all else equal, we expect that our ratings onthe class A notes would not be lowered, the rating on the class B notes would remain within onerating category, and the ratings on the class C and D notes would remain within two ratingcategories of the assigned preliminary ratings. These rating movements are within the toleranceoutlined in our credit stability criteria (see chart 7).



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Chart 7

Money Market Tranche Sizing

The proposed money market tranche (the class A-1 notes) has a 12-month legal final maturitydate (Feb. 22, 2021). To test whether the money market tranche can be repaid by month 12, we rancash flows using assumptions to delay the principal collections during the 12-month period. In ourcash flow run, we assumed zero defaults and a zero absolute prepayment speed on all leases. Wealso stressed the recognition of the monthly lease payments and base residual amounts byapplying a one- and two-month lag, respectively. Based on our stressed cash flow runs,approximately 10 months of collections would be sufficient to pay off the money market tranche.

Legal Final Maturity

To test the legal final maturity dates set for the longer-dated tranches (classes A-2 through C), wedetermined the date on which the respective notes were fully amortized in a zero-loss,zero-prepayment scenario, and then added six months to the result. We also verified that thenotes were paid off in our rating-specific stressed cash flow scenarios by their legal final maturitydates. For the longest-dated security, class D, we added seven months to the tenor of the pool'slatest-maturing receivable to accommodate extensions and residual realization on thereceivables. In each cash flow scenario, we confirmed there is sufficient credit enhancement bothto cover losses and to repay the related notes in full by their legal final maturity date.



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GM Financial

GM Financial (BBB/Stable/--) is a wholly owned subsidiary of General Motors Financial Co. Inc.,which is a wholly owned subsidiary of General Motors Holdings LLC, which is, in turn, a whollyowned subsidiary of GM (BBB/Stable/--). GM is a U.S. corporation that globally producespassenger cars, CUVs, SUVs, and heavy-, medium-, and light-duty trucks. GM Financial is aDelaware corporation formed on July 22, 1992. It is headquartered in Fort Worth, Texas.

GM Financial offers lease financing products for new GM vehicles through its regional creditcenters and dealer relationship managers and has active dealer agreements with the vast majorityof GM dealerships. The dealers originate leases that conform to GM Financial's credit policies, andGM Financial then purchases and services the leases and the associated leased vehicles,generally without recourse to the dealers.

Related Criteria

- Criteria | Structured Finance | General: Methodology To Derive Stressed Interest Rates InStructured Finance, Oct. 18, 2019

- Criteria | Structured Finance | Legal: U.S. Structured Finance Asset Isolation AndSpecial-Purpose Entity Criteria, May 15, 2019

- Criteria | Structured Finance | General: Incorporating Sovereign Risk In Rating StructuredFinance Securities: Methodology And Assumptions, Jan. 30, 2019

- General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017

- Criteria | Structured Finance | General: Methodology: Criteria For Global Structured FinanceTransactions Subject To A Change In Payment Priorities Or Sale Of Collateral Upon ANonmonetary EOD, March 2, 2015

- Criteria - Structured Finance - General: Criteria Methodology Applied To Fees, Expenses, AndIndemnifications, July 12, 2012

- General Criteria: Global Investment Criteria For Temporary Investments In TransactionAccounts, May 31, 2012

- Criteria | Structured Finance | ABS: Revised General Methodology And Assumptions For RatingU.S. ABS Auto Lease Securitizations, Nov. 29, 2011

- Criteria | Structured Finance | ABS: General Methodology And Assumptions For Rating U.S. AutoLoan Securitizations, Jan. 11, 2011

- Criteria | Structured Finance | General: Methodology For Servicer Risk Assessment, May 28,2009

- Criteria | Structured Finance | ABS: Assessing the Risk of Pension Plan Terminations on U.S.Auto Lease Securitizations, Aug. 17, 2004

Related Research

- General Motors Co., March 14, 2019

- Four Ratings Raised, Eight Ratings Affirmed On GM Financial Automobile Leasing Trust 2017-1



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And 2017-2, March 12, 2019

- Global Structured Finance Scenario And Sensitivity Analysis 2016: The Effects of The Top FiveMacroeconomic Factors , Dec. 16, 2016

In addition to the criteria specific to this type of security (listed above), the following criteriaarticles, which are generally applicable to all ratings, may have affected this rating action:"Counterparty Risk Framework: Methodology And Assumptions," March 8, 2019; "Post-DefaultRatings Methodology: When Does Standard & Poor's Raise A Rating From 'D' Or 'SD'?," March 23,2015; "Global Framework For Assessing Operational Risk In Structured Finance Transactions,"Oct. 9, 2014; "Methodology: Timeliness of Payments: Grace Periods, Guarantees, And Use of 'D'And 'SD' Ratings," Oct. 24, 2013; "Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings,"Oct. 1, 2012; "Methodology: Credit Stability Criteria," May 3, 2010; and "Use of CreditWatch AndOutlooks," Sept. 14, 2009.



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